Compass Global Markets' Blog

Market Update - 20th March 2018 - Equities Sold Off, Commodities Flat & AUD/GBP Falls 0.6%

Posted by Patrick Downes on March 20, 2018 at 8:54 AM

A fairly substantial equities selloff overnight with losses of as much as 1.5% in Europe and the U.S did not translate into substantial falls in commodities prices and the Aussie dollar with both mostly managing to finish the session flat. AUD/GBP however was the anomaly falling around 30-40 points as the Pound surged to nearly 18 month highs vs. the Aussie dollar on the back of forecasts that suggest the UK will do quite well out of their Brexit negotiations with no change to the status quo for at least a couple more years. AUD/GBP has been in decline since November 2016 and with higher growth forecasts this trend could certainly continue into the foreseeable future - particularly as Aussie growth falters and the housing market & retail sales remain flat.

Monetary policy minutes from the last RBA meeting are due out this morning and provide the only local economic data released today. While the report is very much backward looking in terms of it has already taken place it still does provide "in-depth insights into the economic conditions that influenced their (RBAs) decision on where to set interest rates", as such it is closely monitored and markets can move around the announcement.

AUD EXCHANGE RATES:

AUD/USD – 0.7716

AUD/GBP – 0.5500

AUD/EUR – 0.6254

AUD/NZD – 1.0651

AUD/JPY – 81.828

USD/BTC – $8,423

OTHER MARKETS: 

All Ords (XAO) – 6,064

Gold – A$1706/oz

Silver –  A$21.15/oz

WTI – US$62.20/barrel

DATA RELEASES TODAY:

AUD - Monetary Policy Meeting Minutes at 11.30am

GBP - CPI y/y at 8.30pm

Day 2 - G20 Meetings

Read More

Topics: Report, Market

Market Update - 19th March 2018 - AUD/USD Gets Hammered In Final 48 Hours Of Trading, Stocks Flat or Higher With Commodities

Posted by Patrick Downes on March 19, 2018 at 8:56 AM

The final trading session of the week finished without much fanfare in the early hours of Saturday morning. The final result saw the Nasdaq flat while the majority of the other U.S and European indices finished up about 0.3%. The Euro Stoxx 50 and Spanish IBEX performed best up 0.7% and 0.8% respectively. Locally Asian markets lost ground while the ASX200 bucked the trend up half a percent. Commodities prices which have been off the boil over the past month or so managed to make marginal gains and look to have found support after a long and consistent run higher since the middle of last year. Corrections always happen and I guess you could probably call this a correction for commodities and metals in what appears to be a new bullish commodities cycle led by the EV metals such as lithium, nickel, cobalt and copper.

The Aussie dollar has not fared as well having dropped quite dramatically during the last 24-48 hours of the trading week. In fact AUD/USD has come off nearly 200 points or 3% since Thursday morning on the back of a likely rise in interest rates by the U.S Federal this coming Thursday morning.  Which brings us to the data announcements for this week and the likely risks for the Aussie dollar. Nothing much out today, but G20 meetings kick off tonight which run for 2 days and involve the top 20 trading nations on the globe. But as mentioned a few sentences ago the big event of the week is the U.S FOMC Federal Funds Rate decision at 5.00am AEST on Thursday morning. All indications are that we'll see a further 25 basis point increase in interest rates to 1.75%, but this has likely already been priced into the market, so the real risks for AUD/USD are in the rate statement or announcement that comes along with the increase in rates. If the Fed appears bullish on the economy and therefore interest rates then we may see further falls in AUD/USD. So certainly a lot happening and I'll keep you posted as well as I can.

AUD EXCHANGE RATES:

AUD/USD – 0.7714

AUD/GBP – 0.5532

AUD/EUR – 0.6277

AUD/NZD – 1.0685

AUD/JPY – 81.794

USD/BTC – $7,897

OTHER MARKETS: 

All Ords (XAO) – 6,054

Gold – A$1702/oz

Silver –  A$21.18/oz

WTI – US$62.30/barrel

DATA RELEASES TODAY:

G20 Meetings

Read More

Topics: Report, Market

ABC TV, Breakfast News with Tony Boyadjian.

Posted by Thomas Su on March 16, 2018 at 10:40 AM

Compass Global Markets' Tony Boyadjian on ABC TV's Breakfast News.

Aired: Thursday 15th March 2018

Call Compass Global Markets for all your International Payments and Receipts Options today on 1300 BEST FX.

 

Read More

Topics: Business, Currency, Report, Market

Market Update - 15th March 2018 - AUD Breaks 0.7900 Briefly Overnight Only To Fall Away

Posted by Patrick Downes on March 15, 2018 at 8:28 AM

The Aussie dollar briefly eclipsed 0.7900 around 11.30pm last night as the latest batch of U.S retail sales and producer prices figures were released to the market, but the momentum didn't last as producer prices increased while retail sales declined - essentially offsetting each other and creating a business as usual scenario for the Aussie dollar. AUD/USD has been stuck in a 0.7700-0.8000 range now for the best part of 6 weeks and again we look for a catalyst for a move out of this range to occur. With no data due out for the rest of this week the next likely catalyst is the U.S FOMC meeting next Thursday morning in which the U.S Federal Reserve will decide to move interest rates higher to 1.75% or keep them at the same level around 1.5%.

Looking at commodities and equities and we still see a picture of volatility as a direct result of Trumps Tariffs, with most markets moving around in pretty choppy fashion. Iron ore, copper and lithium prices moved higher overnight while zinc and nickel lost ground along with U.S equities which finished lower; the Dow Jones was the worst performer down by as much as 1%.

Some tier 2 local economic data is out today in MI inflation expectations and the RBA Bulletin which "contains relevant articles, speeches, statistical tables, and provides detailed analysis of current and future economic conditions from the bank's viewpoint" - thanks ForexFactory.com for that summary.

AUD EXCHANGE RATES:

AUD/USD – 0.7874

AUD/GBP – 0.5639

AUD/EUR – 0.6366

AUD/NZD – 1.0741

AUD/JPY – 83.710

USD/BTC – $8,215

COMMODITIES/EQUITIES: 

All Ords (XAO) – 6,042

Gold – A$1681/oz

Silver –  A$21.00/oz

WTI – US$60.96/barrel

DATA RELEASES TODAY:

AUD - MI Inflation Expectations at 11.00am

AUD - RBA Bulletin at 11.30am

Read More

Topics: Report, Market

Market Update - 14th March 2018 - AUD Struggles To Break Through 0.7900...Again

Posted by Patrick Downes on March 14, 2018 at 9:27 AM

For the last two sessions the AUD has failed to break through 0.7900 vs. the Greenback suggesting a great deal of resistance at this crucial big figure level. U.S CPI came in on expectations overnight at 0.2% for the month of February which probably explains some of the inability of AUD/USD to push through 0.7900. A near term catalyst for the move could be tonight's U.S retail sales and producer prices released around 11.30pm - however we'd have to see a pretty poor number for a break above 0.7900 - alternatively another bullish night for commodities and equities could have a similar result.

Aussie home loans figures were out yesterday and disappointed, coming in a whole 1% below expectations as home loans numbers contracted a further 1.1%, additionally NAB business confidence also declined from 11 to 9 in the latest reading released yesterday.  Out this morning is Westpac consumer sentiment figures.

AUD EXCHANGE RATES:

AUD/USD – 0.7855

AUD/GBP – 0.5624

AUD/EUR – 0.6338

AUD/NZD – 1.0722

AUD/JPY – 83.637

USD/BTC – $9,092

COMMODITIES/EQUITIES: 

All Ords (XAO) – 6,077

Gold – A$1687/oz

Silver –  A$21.11/oz

WTI – US$60.83/barrel

DATA RELEASES TODAY:

CNY - Industrial Production y/y at 1.00pm

EUR - ECB President Draghi Speaks at 7.00pm

USD - Core Retail Sales and Producer Prices at 11.30pm

Read More

Topics: Report, Market

CGM Weekly FX Video Update - 13th March 2018

Posted by Thomas Su on March 13, 2018 at 12:34 PM

 

Read More

Topics: Business, Currency, Report, Market

Market Update - 13th March 2018 - AUD Higher Despite Weaker Commodities Prices, But Risks This Evening

Posted by Patrick Downes on March 13, 2018 at 9:42 AM

Despite substantially weaker commodities prices over the weekend and yesterday, the AUD managed to make gains almost across the board. In fact AUD/USD was up nearly 100 points since my Friday report while the AUD was up nearly 1% vs. the GBP, EUR and JPY. Base metals which are of course a lifeblood of the Australian economy have all come off a great deal over the past few weeks & following Trump's announcement to put tariffs on steel and aluminium, however when you consider that most of the base metals had had a solid run in the lead up to Trumps Tariffs then you could well see the falls as merely profit taking or returning to the mean before the next leg up. I remain bullish on commodities and therefore also the AUD as lets be honest Australia is built on mining, education and housing. Two of those three are not going away and while higher interest rates may impact the housing market you'd have to think mining and our export of education could well pick up the slack if and when required.

The U.K Parliament delivers its Annual Budget tonight, so it's a no brainer that this will have an impact on AUD/GBP - clients wishing to reduce risk on upcoming GBP exposures may be wise to hedge in advance of the Annual Budget release. Similar scenario with U.S CPI at 11.30pm tonight - CPI is of course the main factor with respect to the U.S Fed's decision to raise rates if at all, and a bullish number could take the chance of a rate hike well past 95% when the Fed meets again next Thursday morning.

AUD EXCHANGE RATES:

AUD/USD – 0.7872

AUD/GBP – 0.5660

AUD/EUR – 0.6379

AUD/NZD – 1.0789

AUD/JPY – 83.764

USD/BTC – $8,925

COMMODITIES/EQUITIES: 

All Ords (XAO) – 6,101

Gold – A$1680/oz

Silver –  A$21.00/oz

WTI – US$60.24/barrel

DATA RELEASES TODAY:

GBP - Annual Budget Release at 10.30pm

USD - CPI at 11.30pm

Read More

Topics: Report, Market

Market Update - 9th March 2018 - Trump Tariffs Get Go Ahead, Commodities Prices Decline While USD Surges

Posted by Patrick Downes on March 9, 2018 at 10:15 AM

The USD surged higher and commodities fell overnight as Trump followed through with plans to set high tariffs on the importation of steel and aluminium into the U.S while exempting immediate neighbors Canada and Mexico for 'national security' reasons. AUD/USD fell back below 0.7800 on the wholesale market while the USD moved higher against the Yen and EURO. Since Trump mentioned the tariff in early March commodities have been sinking with zinc, nickel, copper and iron ore all getting belted on the prospects that these tariffs may kick off a trade war with China who imports much of the worlds base metals but also the European Union and many other Asian nations. Personally I think it's quite overdone and considering much of the U.S's steel imports come from Canada (17%), the European Union (15%) and Mexico (9%), with two out of those three already exempted from the tariff then the tariffs may have little impact on the raw materials themselves. The real concern is whether China, Japan and Korea retaliate with their own trade tariffs, but this is a still unknown and perhaps a reason for the weakness in commodities prices. Markets hate uncertainty.

Some Chinese economic data is out today in consumer and producer prices and these always have some impact on the Aussie dollar and the Yuan. This data is followed by U.S non-farm payrolls numbers due early tomorrow morning which are typically seen as the Number 1 bit of economic data out of the U.S each month. Obviously quite a bit of risk for AUD/USD going into tonight particularly given the break below 0.7800 and the weaker commodities prices.

AUD EXCHANGE RATES:

AUD/USD – 0.7786

AUD/GBP – 0.5635

AUD/EUR – 0.6324

AUD/NZD – 1.0723

AUD/JPY – 82.733

USD/BTC – $9,404

COMMODITIES/EQUITIES: 

All Ords (XAO) – 6,046

Gold – A$1697/oz

Silver –  A$21.19/oz

WTI – US$60.24/barrel

DATA RELEASES TODAY:

CNY - CPI & PPI at 12.30pm

JPY - Interest Rate Decision & Monetary Policy Statement

GBP - Manufacturing Production at 8.30pm

USD - Non-Farm Payrolls & Unemployment Rate at 12.30am (tomorrow morning)

Read More

Topics: Report, Market

Market Update - 8th March 2018 - Markets Rattled By Trump Economic Adviser Cohn's Departure

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

So some key things happened yesterday. 1. Quarterly GDP was released by the ABS and showed a seasonally adjusted number of 0.4% for the final quarter of 2017, which for the calendar year came in at a seasonally adjusted 2.4% annual GDP growth. While the figure can't quite be called a shocker it was the third quarter in a row of declining GDP growth and probably therefore explains much of the reasoning behind the RBAs decision earlier in the week to hold interest rates at 1.5%. The AUD is mostly stable despite the weaker GDP numbers.

In the U.S it appears the Trump administration is hell bent on tariffs and that resulted in Gary Cohn - the chief Economic Advisor to Donald Trump - quitting yesterday in frustration and presumably to distance himself from the administration if indeed things turn sour for the U.S economy in the coming months. Trump's White House has been a revolving door of advisers and press secretaries and this is certainly no surprise, but the fact that Cohn quit certainly rattled markets and suggests nothing will stop Trump from instigating a trade war.

Ahead today is local trade balance figures at 11.30am.

AUD EXCHANGE RATES:

AUD/USD – 0.7819

AUD/GBP – 0.5624

AUD/EUR – 0.6300

AUD/NZD – 1.0733

AUD/JPY – 82.932

USD/BTC – $9,826

COMMODITIES/EQUITIES: 

All Ords (XAO) – 6,005

Gold – A$1695/oz

Silver –  A$21.10/oz

WTI – US$61.26/barrel

DATA RELEASES TODAY:

AUD – Trade Balance at 11.30am

EUR - Minimum Bid Rate (Interest Rates) at 11.45pm

Read More

Topics: Report, Market

Market Update - 7th March 2018 - AUD/USD Moves Higher Despite Continued Weak Retail Sales

Posted by Patrick Downes on March 7, 2018 at 9:49 AM

Despite weaker than expected retail sales figures yesterday and a more bearish than anticipated RBA the Aussie Dollar has managed to move higher against the USD, Pound & Euro overnight. The RBA left rates on hold again noting inflation remains below their target and that current interest rates are helping to support the local economy. However there is clearly still work to be done given that retail sales figures came in pretty poor yesterday morning.

Commodity markets were mixed overnight with oil moving higher along with iron ore whilst zinc, copper and the other bass metals were reasonably flat. US equities were generally higher with the best performing index being the NASDAQ up about half a percent, while the Dow was up only a fraction of a percent.

We have more local economic data out today with quarterly GDP figures due at 11:30 a.m. The market is expecting to see around half percent growth in GDP which will obviously be eagerly anticipated buy not only market participants but also the RBA. Later this evening we will see preliminary US ADP non farm payrolls figures which are anticipated to come in around 194,000 new jobs. This figure is released ahead of the official Government number released Friday evening and can therefore result in movements in the USD as the ADP figure usually matches up pretty well with the official non-farm government figure.

AUD EXCHANGE RATES:

AUD/USD – 0.7824

AUD/GBP – 0.5632

AUD/EUR – 0.6306

AUD/NZD – 1.0726

AUD/JPY – 83.067

USD/BTC – $10,769

COMMODITIES: 

Gold – A$1704/oz

Silver –  A$21.40/oz

WTI – US$62.22/barrel

DATA RELEASES TODAY:

AUD - Quarterly GDP at 11.30am

USD – ADP Non-Farm Payrolls at 12.15am

Read More

Topics: Report, Market

Compass Global Markets' Blog

Subscribe to Email Updates

Recent Posts