Compass Global Markets' Blog

Market Update - 13th June 2018 - AUD Little Changed Over The Month, Equities Lower

Posted by Patrick Downes on June 13, 2018 at 9:32 AM

Queens Birthday Monday and a Pies win in the AFL, makes me a very happy FX Dealer. Also the fact I had an extra long weekend certainly helps add some cheer.

No morning reports from me last week, so apologies about that, but the truth is the Aussie dollar has done bugger all over the past month or so. Earlier this month we hit a high of 0.7677 vs. the Greenback while the recent low was 0.7465 in early May. So between that high and low you're talking about 300 points or a roughly 4% range, minuscule considering AUD/USD has been known in the past to move as much as one or even two percent in a day. AUD/USD has been trending higher during this period but the more long range trend going back to Feb suggests we are still in a cyclical downtrend.

On the markets front, U.S and European equities moved generally lower with the exception being the S&P500 up 0.17% and the NASDAQ which bucked the trend and was up 0.57% at the close. Commodities markets generally moved lower, with Iron ore and Uranium prices dropping the most. Uranium is becoming an important metal to watch with those who have an interest in commodities. Uranium is an obvious source of clean base load power and looks set for a revival thanks to the electric vehicle revolution. Additionally the demand/supply setup looks terrific for a sustained bull run when one starts.

Ahead tonight is the FOMC Statement and Federal Reserve interest rate decision - expectations are that a well choreographed 25 basis point increase to 2.00% is on the cards - as such we're probably not likely to see too much volatility on the part of the rate increase, but more so on the attached rhetoric and commentary on further rate increase - watch this space.

AUD EXCHANGE RATES:

AUD/USD – 0.7569

AUD/GBP – 0.5661

AUD/EUR – 0.6443

AUD/NZD – 1.0810

AUD/JPY – 82.606

USD/BTC – $6,499

OTHER MARKETS: 

All Ords (XAO) – 6,042

Gold – A$1711/oz

Silver –  A$22.26/oz

WTI – US$65.76/barrel

DATA RELEASES TODAY:

AUD - RBA Gov Lowe Speaks at 12.00pm

USD - Fed Funds Rate & FOMC Statement at 4.00am

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Topics: Report, Market

5th June 2018: RBA Announcement Cash Rate unchanged at 1.50 per cent.

Posted by Thomas Su on June 5, 2018 at 2:31 PM

Statement by Philip Lowe, Governor: Monetary Policy Decision

At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 per cent.

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Market Update - 30th May 2018 - Italy Political Woes Drag Down AUD & Equities, While Gold Surges

Posted by Patrick Downes on May 30, 2018 at 8:37 AM

U.S and European stocks got pummelled overnight while Gold surged as Italy's political prospects jolted the markets just when things appeared to be settling down. Specifically fears grew on the "prospect that Italy might need a fresh election that could be a referendum on the nation’s inclusion in the euro zone." Obviously anything relating to Brexit, Grexit or Itexit has in the past jolted markets and caused a surge in volatility and it appears unfinished business has come back to haunt markets once again. On the flip side, the good news is that China continues to expand while U.S earnings seasons has showed strong growth in earnings but with that also growing inflation.

Looking at currencies and we see that the Euro got pummelled on the Italy news which has helped boost AUD/EUR to near 0.6500 or five month highs. Things remain bullish for AUD/EUR and we may yet see further gains here as Italy's political woes pan out over the next few weeks or even months - these things have a habit of dragging on.

U.S preliminary GDP numbers and preliminary employment numbers are out this evening with the market expecting to see about 186K new jobs created and quarterly GDP running at an estimated 2.3%.

AUD EXCHANGE RATES:

AUD/USD – 0.7505

AUD/GBP – 0.5659

AUD/EUR – 0.6499

AUD/NZD – 1.0873

AUD/JPY – 81.489

USD/BTC – $7,419

OTHER MARKETS: 

All Ords (XAO) – 6,121

Gold – A$1731/oz

Silver –  A$21.83/oz

WTI – US$66.97/barrel

DATA RELEASES TODAY:

USD - ADP Non-Farm Employment Change at 10.15pm

USD - Prelim GDP q/q at 10.30pm

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Topics: Report, Market

Market Update - 29th May 2018 - Commodity Prices Remain Subdued, AUD/EUR To Test 0.6500

Posted by Patrick Downes on May 29, 2018 at 9:12 AM

Again there is no economic data out today or this evening which in conjunction with bank holidays in the U.S and U.K overnight means very little movement in currency markets. AUD/USD is continuing to tread water in the 0.7500's, while AUD/EUR is the big mover up again and looking to break through 0.6500 potentially in the next few days. Commodity prices remain subdued and this is dragging on the Aussie dollar which has for the better part of a month traded in a tight range between 0.7410 and 0.7600 vs. the Greenback.

So other than that there is really not too much more to discuss. Have a great day.

AUD EXCHANGE RATES:

AUD/USD – 0.7545

AUD/GBP – 0.5667

AUD/EUR – 0.6488

AUD/NZD – 1.0871

AUD/JPY – 82.585

USD/BTC – $7,098

OTHER MARKETS: 

All Ords (XAO) – 6,113

Gold – A$1719/oz

Silver –  A$21.83/oz

WTI – US$66.61/barrel

DATA RELEASES TODAY:

No economic data today or this evening

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Topics: Report, Market

Market Update - 28th May 2018 - AUD Continues To Hover In The Mid To Low 0.75's

Posted by Patrick Downes on May 28, 2018 at 8:29 AM

An absence of news over the weekend and no economic data sees the Aussie dollar little changed since Friday. AUD/USD remains in the mid 0.75's, while AUD/EUR and AUD/GBP have continued to inch higher. Bitcoin which has lost much of its appeal from last year has also continued to weaken and is threatening to once again dip below US$7000 a coin.

No economic data out today or tomorrow and we have bank holidays in both the U.K and U.S tonight which means payments in USD and GBP will not go out until Tuesday evening when U.K and U.S banks re-open for business.

AUD EXCHANGE RATES:

AUD/USD – 0.7557

AUD/GBP – 0.5678

AUD/EUR – 0.6469

AUD/NZD – 1.0911

AUD/JPY – 82.877

USD/BTC – $7,296

OTHER MARKETS: 

All Ords (XAO) – 6,141

Gold – A$1716/oz

Silver –  A$21.80/oz

WTI – US$67.02/barrel

DATA RELEASES TODAY:

No economic data out

Bank Holidays In the U.S and U.K

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Topics: Report, Market

Market Update - 24th May 2018 - U.S Fed Reassures Markets That They Will Raise Rates Gradually

Posted by Patrick Downes on May 24, 2018 at 9:21 AM

For me, writing this morning report is a great way to kick start the day as it not only gives me an early accomplishment which typically leads to further accomplishments through the day, but more importantly it is a fantastic way for me to force myself to look at markets and what has happened overnight in the financial universe, which so many of you always want feedback on.

The so called Aussie dollar is continuing to tread water vs. the Greenback, but more recently has started picking up gains against the Euro and GBP after a sustained sell off. The news that AUD/GBP and AUD/GBP is great for the long suffering importers but not so great for those of you who have exposures in GBP and EUR which you need to convert back to Aussie dollars. But as I've mentioned in private conversation AUD/GBP and AUD/EUR still represent great value at current levels.

Minutes from the latest U.S Federal Reserve meeting which were released overnight showed that the Fed were likely to be more accommodating of rising inflation and were therefore less likely to rise interest rates quicker than already priced in which is about 3 rate hikes this year. That was seen as reasonably upbeat news for markets as the Fed has been known in the past to hike rates so hard that they inevitably trigger a recession or equities bear market. It would appear that the new Fed Governor Powell may have learnt from his predecessors to take it slowly and let the market digest rate hikes before heaping on further stress. The good news saw equities move higher, with the Dow and S&P up 0.21% and 0.32% respectively.

AUD EXCHANGE RATES:

AUD/USD – 0.7565

AUD/GBP – 0.5663

AUD/EUR – 0.6462

AUD/NZD – 1.0917

AUD/JPY – 83.212

USD/BTC – $7,541

OTHER MARKETS: 

All Ords (XAO) – 6,140

Gold – A$1709/oz

Silver –  A$21.76/oz

WTI – US$71.86/barrel

DATA RELEASES TODAY:

GBP – Retail Sales m/m at 6.30pm

EUR - ECB Monetary Policy Meeting Accounts at 9.30pm

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Topics: Report, Market

Market Update - 23rd May 2018 - AUD/USD Back To Its Historic Average In The 0.75's

Posted by Patrick Downes on May 23, 2018 at 8:11 AM

I was having a good uninterrupted run publishing my reports each morning, however missed one yesterday which is bound to happen when you work in a service based industry. Thankfully not a great deal happened in the early part of the week as we had public holidays in Canada and throughout Europe. The most important thing - for the vast majority of you - is that AUD/USD has moved higher, which was always bound to happen after such a sustained sell off. 0.75 is the historic average for AUD/USD and that's smack bang where we are right now.

Trump's tariff war is over, so that has certainly helped bolster the Aussie dollars appeal as a result of expectations of improved trade which is of course great for our number 1 export (commodities).

A bit of economic news out today with the MI Leading Index at 10.30am followed by Construction Work Done at 11.30am. The MI Leading Index has been exceptionally flat for the most part since 2014, with the index barely ticking above about 0.3% and spending half the time in negative territory over the same period. More recently though it appears growth is slowly filtering back into the economy with two of the four highest readings posted since late 2013 occurring in Jan and March of this year. Construction numbers are likely to be flat once again as the end of the latest property cycle comes to a close.

AUD EXCHANGE RATES:

AUD/USD – 0.7575

AUD/GBP – 0.5637

AUD/EUR – 0.6430

AUD/NZD – 1.0924

AUD/JPY – 84.004

USD/BTC – $8,066

OTHER MARKETS: 

All Ords (XAO) – 6,150

Gold – A$1704/oz

Silver –  A$21.84/oz

WTI – US$72.09/barrel

DATA RELEASES TODAY:

AUD - Construction Work Done q/q at 11.30am

AUD - RBA Gov Lowe Speaks at 6.00pm

GBP - CPI at 6.30pm

USD - FOMC Meeting Minutes at 4.00am

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Topics: Report, Market

Market Update - 21st May 2018 - Trump/China End Trade War, Stocks Set To Open Higher

Posted by Patrick Downes on May 21, 2018 at 8:28 AM

No economic data out on Friday or Friday evening, as such the Aussie dollar is little changed. Probably the big news over the weekend is that Trump's trade war has come to a sudden end with the big orange man backing down amid China's willingness to shoot back with gusto on any tariffs imposed by the Trump administration. Essentially it turns out that China has "agreed" to significantly increase it's imports from the U.S but no figures or numbers have been agreed to or supplied by either party. As such it's probably business as usual and life goes on.

U.S and European equities performed poorly on Friday evening however the news of Trump's tariffs capitulation has sent stock futures higher, with the Dow and S&P500 set to open nearly 1% higher when markets open later this evening in the U.S.

AUD EXCHANGE RATES:

AUD/USD – 0.7523

AUD/GBP – 0.5579

AUD/EUR – 0.6390

AUD/NZD – 1.0858

AUD/JPY – 83.375

USD/BTC – $8,508

OTHER MARKETS: 

All Ords (XAO) – 6,190

Gold – A$1717/oz

Silver –  A$21.87/oz

WTI – US$71.69/barrel

DATA RELEASES TODAY:

Bank Holidays in France, Germany, Switzerland and Canada

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Topics: Report, Market

Market Update - 18th May 2018 - AUD Stable Despite Higher Unemployment Rate

Posted by Patrick Downes on May 18, 2018 at 8:28 AM

Quiet day ahead and an exceptionally quiet night for markets so I won't bore you with a long winded report about nothing. Rather I'll provide a pretty quick summary.

The Aussie dollar is still range trading with AUD/USD stuck in the 0.74-0.75 range as it has all month, while AUD/GBP and AUD/EUR look comfortable in the 0.55's and 0.63's respectively. No data is due out today but we did have employment numbers out yesterday which showed another 22k jobs were created, but the month previous had a revision lower with jobs actually lost in March, which probably explains the jump in the unemployment rate to 5.6%. Participation remains an issue with the number at about 65%, but that could be related to demographics and and ageing population.

Have a lovely weekend.

AUD EXCHANGE RATES:

AUD/USD – 0.7510

AUD/GBP – 0.5554

AUD/EUR – 0.6365

AUD/NZD – 1.0920

AUD/JPY – 83.252

USD/BTC – $7,993

OTHER MARKETS: 

All Ords (XAO) – 6,197

Gold – A$1718/oz

Silver –  A$21.88/oz

WTI – US$71.63/barrel

DATA RELEASES TODAY:

No data

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Topics: Report, Market

Market Update - 17th May 2018 - Equities, Commodities & AUD Move Higher

Posted by Patrick Downes on May 17, 2018 at 8:26 AM

Equities, commodities and the Aussie dollar have moved higher in unison overnight while the traditional safe haven of Gold has retreated suggesting renewed optimism in global financial markets. The Aussie dollar made gains against all the majors with AUD/USD again finding support in the 0.7400's and pushing back into the safety of the 0.7500 level.

Data released locally here yesterday showed wages growth remains subdued with the index coming in at 0.5% which was lower than the 0.6% forecast. Additionally the previous quarters reading was revised lower showing the downward spiral in wages growth may yet have further to run. Other data out yesterday was Westpac Consumer Sentiment which came in negative once again while providing a great example of the impact weak wages growth is having on the economy and the very subdued retail sales sector.  Commodities, immigration and education however continue to support the Australian economy without which we'd probably be in dire trouble.

Employment numbers are released close to lunch time today and expectations are that we'll see 20K new jobs created but no change to the unemployment rate which stands at 5.5%. In New Zealand, they release their annual budget papers.

AUD EXCHANGE RATES:

AUD/USD – 0.7515

AUD/GBP – 0.5561

AUD/EUR – 0.6361

AUD/NZD – 1.0889

AUD/JPY – 82.895

USD/BTC – $8,266

OTHER MARKETS: 

All Ords (XAO) – 6,208

Gold – A$1717/oz

Silver –  A$21.81/oz

WTI – US$71.59/barrel

DATA RELEASES TODAY:

AUD – Unemployment Rate and Employment Change at 11.30am

NZD - Annual Budget Release at midday

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Topics: Report, Market

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