Compass Global Markets' Blog

Patrick Downes

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Market Update - 20th December 2017 - AUD and Iron Ore Holding Onto Gains

Posted by Patrick Downes on December 20, 2017 at 10:01 AM

Just rates and upcoming data today as I'm running quite behind schedule.

AUD EXCHANGE RATES:

AUD/USD – 0.7663

AUD/GBP – 0.5722

AUD/EUR – 0.6470

AUD/NZD – 1.0984

AUD/JPY – 86.494

COMMODITIES: 

Gold – A$1646/oz

Silver –  A$21.07/oz

WTI – US$57.63/barrel

DATA RELEASES TODAY:

AUD – MI Leading Index at 10.30am

GBP - BOE Gov. Carney Speaks at 12.15am

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Topics: Report, Market

Market Update - 18th December 2017 - AUD Higher Vs. The Pound, Lower Vs. The Greenback Ahead of MYEFO

Posted by Patrick Downes on December 18, 2017 at 8:35 AM

AUD/EUR hasn't moved since Friday morning, while AUD/USD is marginally lower and AUD/GBP higher following the Bank of England's decision to hold interest rates steady at 0.5% late last week in addition to warning of slower growth.

Ahead today is the annual Mid-Year Economic & Fiscal Outlook (MYEFO). This is released by our Treasury around 12.15pm today and summed up "provides an updated economic outlook, growth forecasts, and compares the government's fiscal performance to the strategy outlined in the prior Annual Budget." While the data is not an interest rate decision nor employment figure it does give an updated view on a whole range of aspects of the Aussie economy and is likely to include views on how the housing market is doing, commodities prices and so forth and so may have a material impact on the Aussie dollar today. Additionally you'd think the Australian stock market will be impacted to some degree by certain comments or assumptions in the MYEFO.

In other news, Bitcoin has tested 20K USD over the weekend and may well push through this level this week while the ASX 200 stock market index managed to break through and close above the psychological 6000 barrier - lets hope it's the start of a nice run higher particularly given Aussie equities have done very little over the past 10 years.

AUD EXCHANGE RATES:

AUD/USD – 0.7641

AUD/GBP – 0.5734

AUD/EUR – 0.6505

AUD/NZD – 1.0927

AUD/JPY – 86.081

COMMODITIES: 

Gold – A$1641/oz

Silver –  A$20.98/oz

WTI – US$57.37/barrel

DATA RELEASES TODAY:

AUD - Mid-Year Economic & Fiscal Outlook at 12.15pm

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Topics: Report, Market

Market Update - 15th December 2017 - AUD Continues To Gradually Move Higher, Take Advantage If You Can

Posted by Patrick Downes on December 15, 2017 at 8:23 AM

Stronger than anticipated U.S retail sales didn't stop the Aussie dollar from hitting fresh one month highs overnight with the AUD now up about 2.5% since Monday vs. the Greenback and similar margins vs. the Euro and Pound. Again, it could be worth taking advantage of the Aussie dollar at current levels given the uncertainty that remains in the market and particularly given it was only last week that we were threatening the low 0.70's vs. the Greenback.

No economic data is due out today. So rather than waffle on I'll just say have a nice weekend!

AUD EXCHANGE RATES:

AUD/USD – 0.7671

AUD/GBP – 0.5709

AUD/EUR – 0.6507

AUD/NZD – 1.0977

AUD/JPY – 86.116

COMMODITIES: 

Gold – A$1633/oz

Silver –  A$20.73/oz

WTI – US$57.17/barrel

DATA RELEASES TODAY:

No data

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Topics: Report, Market

Market Update - 14th December 2017 - AUD Surges Higher On Weak U.S Economic Data

Posted by Patrick Downes on December 14, 2017 at 8:34 AM

To those of you who have been contact with me over the past week or two hoping for higher rates, today potentially provides that opportunity with AUD up by around 1% vs the Greenback and similar amounts vs. the EURO and GBP since Monday. The reason being that despite the U.S raising interest rates to 1.5% (the same as here in Australia) they suggested that that might just be it for a little while given flatter economic numbers that what we've seen in the earlier part of the year. I personally still think it's inevitable that we'll see a lower AUD, not because I'm sadistic but rather the U.S economy continues to grow at a much faster pace than Australia, and in all likelihood we might see no rate change here from 1.5%, but potentially between 2-4 0.25% hikes in the U.S next year. So with that said, take advantage of the Aussie when you can and be prudent with respect to your hedging and buying strategy.

Local employment data is due out today at 11.30am followed by Chinese industrial production figures at 1.00pm. Later this evening the Bank of England decide on their own interest rates, so we could see a bit of volatility for AUD/GBP, which remains near 1 year lows.

AUD EXCHANGE RATES:

AUD/USD – 0.7635

AUD/GBP – 0.5690

AUD/EUR – 0.6465

AUD/NZD – 1.0871

AUD/JPY – 85.915

COMMODITIES: 

Gold – A$1645/oz

Silver –  A$21.05/oz

WTI – US$56.71/barrel

DATA RELEASES TODAY:

AUD - Employment Numbers at 11.30am

CNY - Chinese Industrial Production at 1.00pm

GBP - Official Bank Rate Vote at 11.00pm

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Topics: Report, Market

Market Update - 12th December 2017 - AUD Holds Off 74's As Commodities Prices Rise

Posted by Patrick Downes on December 12, 2017 at 8:38 AM

Stocks and commodities rallied overnight in the absence of economic data or noteworthy news. With Zinc and Copper looking like the best performers, while Iron ore is still around US$69 a tonne. Higher grade iron ore (65%Fe) remains at a premium of nearly US$20 a tonne at US$86. Interesting side note, Aussie miner Mt Gibson is set to reopen the high grade iron ore mine Koolan Island around 2019. So for those interested in mining stocks, worth taking a look, particularly if iron ore prices remain elevated.

Not surprisingly the Aussie dollar has a had a boost thanks to the increase in commodities prices overnight and AUD is up right across the board. AUD/USD which looked destined to be trading in the 0.74's today is now safely back in the low 0.75's, however with rising interest rates in the U.S and abroad and stagnant rates here in Australia, it is very hard to be bullish AUD.

AUD EXCHANGE RATES:

AUD/USD – 0.7527

AUD/GBP – 0.5642

AUD/EUR – 0.6396

AUD/NZD – 1.0898

AUD/JPY – 85.464

COMMODITIES: 

Gold – A$165/oz

Silver –  A$20.90/oz

WTI – US$58.02/barrel

DATA RELEASES TODAY:

GBP - CPI at 8.30pm

USD - PPI at 12.30am

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Topics: Report, Market

Market Update - 11th December 2017 - AUD/USD Perhaps Headed Towards 0.7400 This Week

Posted by Patrick Downes on December 11, 2017 at 9:00 AM

We set up our Xmas tree yesterday, a little late perhaps but better than next week. At $60 a tree I think it's quite a bargain to have the real thing and the authentic Xmas tree smell.

The Aussie is off around 100 points since Thursday and looking seemingly quite weak amid positive U.S employment numbers and an avalanche of news which suggests rates in the U.S will rise this month and then as many as 2-4 times in 2018. Probably the only thing keeping the Aussie dollar high right now is iron ore prices which remain around $70 a tonne. If rates in the U.S do rise as many as 4 times next year we could be in for a wild ride vs. the Greenback and without making any bold predictions it'd probably be wise to brace for something around the 0.60's next year, hedging would be the best strategy going forward however give me a call on 0431 278 632 if you'd like to discuss strategy - something I've become quite good at over 10 years.

No economic data is out today, however the ASX is looking like it have a good start to the week with futures markets predicting a 0.3% rise in the ASX 200. Have a great day.

AUD EXCHANGE RATES:

AUD/USD – 0.7506

AUD/GBP – 0.5606

AUD/EUR – 0.6378

AUD/NZD – 1.0967

AUD/JPY – 85.225

COMMODITIES: 

Gold – A$1662/oz

Silver –  A$21.10/oz

WTI – US$57.35/barrel

DATA RELEASES TODAY:

No economic data today

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Topics: Report, Market

Market Update - 5th December 2017 - AUD Treading Water Ahead Of Cash Rate Decision

Posted by Patrick Downes on December 5, 2017 at 8:01 AM

A busy day ahead for the local currency with current account figures, retail sales numbers and the latest from the RBA on interest rates all due. And while the Aussie dollar has been treading water over the past few weeks today could see some veritable action particularly if economic numbers surprise to the upside, or the RBA decide a surprise hike in interest rates is in order - however I would suggest that with wages growth, retail sales and nearly every other sector other than mining weak, nearly no economists are expecting a hike in interest rates.

Retail sales have been flat or negative every month since September despite predictions each month that we will see some growth in retail sales, so with the same expected again (0.3% improvement) I would have to think going on the trend that the figures are likely to be flat or negative again, however I'd certainly like to see some signs of life in the retail sector!

Other than that iron ore prices have been solid and Bitcoin continues to surge higher with the latter now nearly touching 12,000USD per Bitcoin...madness? Perhaps...A bubble, definitely! I'm still having people asking me how to 'invest' in Bitcoin, so again I warn those with a penchant for speculation this is 100% a bubble and when it bursts, not only will many tears be shed, but also some people's life savings....don't be one of them.

AUD EXCHANGE RATES:

AUD/USD – 0.7593

AUD/GBP – 0.5637

AUD/EUR – 0.6405

AUD/NZD – 1.1085

AUD/JPY – 85.472

COMMODITIES: 

Gold – A$1680/oz

Silver –  A$21.52/oz

WTI – US$57.41/barrel

DATA RELEASES TODAY:

AUD - Current Account & Retail Sales at 11.30am

AUD - Cash Rate & RBA Statement at 2.30pm

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Topics: Report, Market

Market Update - 1st December 2017 - AUD Retreats On Weaker Commodities Prices

Posted by Patrick Downes on December 1, 2017 at 8:44 AM

Mixed results for equities overnight with U.S equities making solid gains while European equities lost ground amid slower growth. Overall however Europe's prospects have been improving and we've seen that in the AUD/EUR rate which has been in decline since late-February - AUD/EUR this year is down around 1000 points or 10 cents from 0.7320 to 0.6350 today.

Data released tonight includes both UK and US manufacturing PMI with early predictions suggesting pretty flat results. As such it's probably likely to be a quiet day for markets and the Aussie dollar.

AUD EXCHANGE RATES:

AUD/USD – 0.7565

AUD/GBP – 0.5591

AUD/EUR – 0.6352

AUD/NZD – 1.1068

AUD/JPY – 85.164

COMMODITIES: 

Gold – A$1685/oz

Silver –  A$21.74/oz

WTI – US$57.34/barrel

DATA RELEASES TODAY:

GBP - Manufacturing PMI at 8.30pm

USD - ISM Manufacturing PMI at 2.00am

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Topics: Report, Market

Market Update - 30th November 2017 - AUD/USD Falls Back Below 0.7600, While AUD/GBP Falls On Positive Brexit Talks

Posted by Patrick Downes on November 30, 2017 at 10:02 AM

The Aussie dollar has continued to track pretty closely to the 0.76 figure vs. the USD with brief moves both above and below over the past fortnight, which tends to suggest that it's building in some solid resistance and support levels around the figure. What that would mean is we'd need a pretty strong catalyst to break out of the range and that could be something like a rate hike in the U.S, solid jobs numbers or something along those lines. Today's building approvals and new home sales figures are unlikely to be such a catalyst. In the U.K it appears Brexit talks are moving forward and closer to a resolution which helped support the Pound and saw AUD/GBP head lower and hold below 0.5700. For those waiting on the sidelines for prospects to improve with respect to AUD/GBP you could be in for a long wait and I'd suggest looking at hedging a portion of your GBP exposures would be prudent.

The flavour of the year Bitcoin or BTC pushed through US$10,000 yesterday afternoon before swiftly entering bear market territory with a 20% correction from a high of US$11,384. It's now trading about US$10,113 and it has been suggested this could be one of the greatest bubbles in human history...my advice...don't be the last person standing with no seat.

In other news iron ore prices have again been moving higher which is supporting the Aussie dollar, but iron ore prices remain exceptionally volatile having whipsawed between $95 and $53 bucks a tonne just this year. Ahead today is local Aussie date in New Home Sales figures and Building Approvals which is closely followed by Chinese economic data around lunchtime AEST. Strong numbers here could further support iron ore and perhaps see it testing $70 a tonne this week.

AUD EXCHANGE RATES:

AUD/USD – 0.7573

AUD/GBP – 0.5645

AUD/EUR – 0.6389

AUD/NZD – 1.0996

AUD/JPY – 84.764

COMMODITIES: 

Gold – A$1695/oz

Silver –  A$21.84/oz

WTI – US$57.40/barrel

DATA RELEASES TODAY:

AUD - HIA New Home Sales at 11.00am

AUD - Building Approvals at 11.30am

CNY - Manufacturing & Non-Manufacturing PMI at midday (AEST)

EUR - CPI Flash Estimate at 9.00pm

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Topics: Report, Market

Market Update - 28th November 2017 - BTC Heading Towards US$10,000, AUD/USD Holding Onto 0.7600

Posted by Patrick Downes on November 28, 2017 at 10:06 AM

Is Bitcoin the future of international payments? Maybe not.

But how about crypto-currencies in general and the block-chain? Yes, very likely.

Where am I going with this? Well, whilst I do believe there is a future for crypto-currencies and the block-chain in delivering international payments, I'm suggesting caution to those wishing to invest their life savings in BTC at this stage in the market. Why? Because if it looks like a bubble, smells like a bubble and acts like a bubble, it probably is a bubble. And with so much of the trade in BTC speculative people are quite simply not using BTC for anything other than a tool for speculation on future price growth.

Anyway, to the Aussie dollar and we are just clinging onto 0.7600 this morning after a quiet session yesterday and flat results overnight for both commodities and equities. Iron ore futures are holding up however with prices for our major export near three month highs.

No data is released tonight, however a speech from Bank of England Governor Carney could be a market move for the Pound and therefore relevant to those with AUD/GBP exposures.

AUD EXCHANGE RATES:

AUD/USD – 0.7601

AUD/GBP – 0.5706

AUD/EUR – 0.6388

AUD/NZD – 1.0984

AUD/JPY – 84.425

COMMODITIES: 

Gold – A$1702/oz

Silver –  A$22.43/oz

WTI – US$57.83/barrel

DATA RELEASES TODAY:

GBP - BOE Gov. Carney Speaks at 6.30pm

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Topics: Report, Market

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