Compass Global Markets' Blog

Market Update - 3rd November 2016 - Stocks/Commodities On Back Foot, While UK Courts Rule On Brexit Legality

Posted by Patrick Downes on November 3, 2016 at 8:38 AM

I hope everyone enjoyed their respective weekends/long weekend and of course backed a few winners at Flemington yesterday.

Commodities and stocks took a dip overnight amid widespread risk aversion in the lead up to the U.S Presidential election which is due to take place next Tuesday night our time. With polls tighetening and subsequent renewed risk aversion, markets are suggesting that a Drumpf win will be a negative for stocks and commodities, while a Clinton win will be business as usual hence AUD/USD which is classed as a risk asset (moving up when times are good and down when times are bad) you'd have to expect that a solid Clinton/Democrat win next Tuesday night will result in a little uptick in AUD/USD, perhaps again testing the seemingly unbreakable 0.7700 figure.

Overnight U.S preliminary jobs numbers went backwards marginally but had little impact on the AUD/USD cross which is remaining range bound between 0.7400-0.7650. AUD/EUR and AUD/GBP remain solid buying at current levels but a key vote on the legality of the U.K to leave the EU is due to be ruled upon tonight around 9.00pm. This could have a dramatic impact on AUD/GBP, so those wishing to avoid risk should buy GBP today.

DATA RELEASES TODAY:

AUD – Trade Balance at 11.30am

GBP – Services PMI at 8.30pm

GBP - Official Bank Rate decision at 11.00pm

AUD EXCHANGE RATES:

AUD/USD – 0.7642

AUD/GBP – 0.6201

AUD/EUR – 0.6885

AUD/NZD – 1.0512

AUD/JPY – 78.85

***Above rates are indicative wholesale rates and intended as a guide only***

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Patrick Downes

Senior Corporate FX Dealer

Compass Markets

Phone Patrick - +61 03 9099 8459

  Email Patrick: patrick@compassmarkets.com

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