Compass Global Markets' Blog

Market Update - 3rd December 2018 - AUD Surges On U.S/China Trade Ceasefire

Posted by Patrick Downes on December 3, 2018 at 8:48 AM

I didn't have time to write a report late last week as we had annual compliance training in Sydney - however the good news is that over the weekend we've had the double whammy of good news of 1) the U.S Federal Reserve likely to slow it's pace of interest rate hikes and 2) at the G20, China and the U.S have agreed to a 90 day truce to their trade war in hopes of coming to an agreement in that time on their varied trade disputes.

As a result of this news over the weekend, the AUD has shot up quite dramatically across the board, while gains are also expected across the commodities and equities space. The ASX200 is anticipated to open around half a percent higher, while AUD/USD is up nearly 1% in early trade. Commodity prices could be the biggest benefactor of the weekends news with rallies in iron ore, copper and zinc all likely over the course of the week, all of these things will be very bullish for the AUD.

Economic data out today and tonight include some local AU data in building approvals and job ads, while tonight we see ISM manufacturing numbers out of the U.S.

AUD EXCHANGE RATES:

AUD/USD – 0.7346

AUD/GBP – 0.5736

AUD/EUR – 0.6463

AUD/NZD – 1.0635

AUD/JPY – 83.603

USD/BTC – $4,144

OTHER MARKETS:

All Ords (XAO) – 5,749

Gold – A$1,655/oz

Silver –  A$19.22/oz

WTI – US$50.71/barrel

DATA RELEASES TODAY:

AUD - Building Approvals m/m at 11.30am

AUD - ANZ Job Advertisements m/m at 11.30am

USD - ISM Manufacturing PMI at 2.00am

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Topics: Market, Report

Market Update - 28th November 2018 - AUD & Equities Finish The Overnight Session Flat

Posted by Patrick Downes on November 28, 2018 at 8:44 AM

U.S Consumer confidence fell in November for the first time in around five months as trade war tensions and a tanking stock market start to weigh on American's confidence in their economy.  Despite the weaker consumer confidence U.S equities managed to finish slightly ahead with the Dow up 0.44% at the close; European equities fared worse down around 0.2% to 0.4%. The Aussie Dollar moved higher vs. the GBP and EUR but fell marginally vs. the Greenback.

No economic data out today but we have UK Bank Stress tests later today followed U.S Prelim GDP around midnight.

AUD EXCHANGE RATES:

AUD/USD – 0.7191

AUD/GBP – 0.5642

AUD/EUR – 0.6365

AUD/NZD – 1.0609

AUD/JPY – 81.912

USD/BTC – $3,696

OTHER MARKETS:

All Ords (XAO) – 5,802

Gold – A$1,681/oz

Silver –  A$19.58/oz

WTI – US$51.94/barrel

DATA RELEASES TODAY:

GBP - Bank Stress Test Results

USD - Prelim GDP q/q at 12.30am

USD - Fed Chair Powell Speaks at 4.00am

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Topics: Market, Report

Market Update - 27th November 2018 - AUD Holding Steady While Overseas Equities Continue Volatile Streak Up 2%

Posted by Patrick Downes on November 27, 2018 at 8:28 AM

The AUD is unchanged this morning and continues to hover around 0.7200 vs. the Greenback and 0.6350 vs. the EURO, while AUD/GBP is holding just above 0.5600 as U.K law makers continue to mull over the details of the Brexit deal that the EU have agreed to.

Equity markets continued their volatile streak led again by the tech heavy Nasdaq which finished up 2.06% in New York overnight, while the S&P and Dow moved higher by as much as 1.5%. European equities also advanced, gaining between 1% and 2%.

A whole raft of Central Bank speeches throughout yesterday and overnight had little impact on markets and gleamed very little new information as such their isn't a great deal to report.

U.S CB Consumer Confidence is due out tonight around 2.00am, with economists tipping a very slight decline in the index.

AUD EXCHANGE RATES:

AUD/USD – 0.7200

AUD/GBP – 0.5612

AUD/EUR – 0.6347

AUD/NZD – 1.0635

AUD/JPY – 81.821

USD/BTC – $3,619

OTHER MARKETS:

All Ords (XAO) – 5,749

Gold – A$1,691/oz

Silver –  A$19.72/oz

WTI – US$51.79/barrel

DATA RELEASES TODAY:

USD – CB Consumer Confidence at 2.00am

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Topics: Market, Report

Market Update - 26th November 2018 - Bitcoin & Gold Slide, But AUD/USD Holding Above 0.7200

Posted by Patrick Downes on November 26, 2018 at 9:17 AM

I've been crook all weekend with a cold/head cold, so this market update could be brief...but let's see how we go.

First of all the big movers on Friday and through the weekend were Bitcoin and Oil. Both dropped considerable amounts but for different reasons, with WTI off a whopping $4 a barrel or 7% since Friday morning as booming U.S shale oil production saw the U.S overtake Saudi Arabia and become the worlds number 1 oil producer. Bitcoin - everyone's favourite crypto-currency... - dropped around 500USD per coin or 11% in the same period for reasons unknown, but took many by surprise. Whether BTC is a buy around 3,500USD a coin is up for debate, but at this stage with very limited practical use I'd suggest steering clear....

Whats the AUD been doing? Well it more or less held ground against the USD and EURO but fell against the GBP as Brexit came closer to reality. AUD/GBP reached a high of 0.5730 last week on Brexit worries, but the GBP swiftly bounced back as the EU endorsed Theresa May's latest Brexit deal. The British parliament still needs to hold a vote sometime before Christmas to accept or reject the Brexit deal.

In other news equities markets remain jittery along with commodity prices. U.S equities finished lower Friday night, while European equities advanced, the German DAX was the best performer up around 0.5%. Our local index is set to open lower following the U.S lead of Friday night.

No data out today, but we see a raft of speeches from Governors and Assistant Governors at the RBA, ECB and BOE over the next 24 hours.

AUD EXCHANGE RATES:

AUD/USD – 0.7202

AUD/GBP – 0.5603

AUD/EUR – 0.6343

AUD/NZD – 1.0611

AUD/JPY – 81.366

USD/BTC – $3,920

OTHER MARKETS:

All Ords (XAO) – 5,793

Gold – A$1,692/oz

Silver –  A$19.74/oz

WTI – US$50.41/barrel

DATA RELEASES TODAY:

AUD - RBA Gov Lowe Speaks at 9.15am

AUD - RBA Assist Gov Kent Speaks at 2.00pm

EUR - ECB President Draghi Speaks at 1.00am

GBP - BOE Gov Carney Speaks at 5.30am (tomorrow morning)

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Topics: Market, Report

Market Update - 22nd November 2018 - AUD Advances With Equities & Commodities

Posted by Patrick Downes on November 22, 2018 at 8:42 AM

The Aussie dollar has shot up nearly 1% overnight thanks to stronger commodity prices and a good night for global equities, which saw the NASDAQ up nearly 1% while the German DAX was the best performer in Europe up 1.61%. Of the major indices across the globe the U.S triumvirate of the DOW, NASDAQ and S&P are the only stock markets to remain in positive territory over the past year, the rest are all now negative with the Chinese market leading the pack down nearly 24%.

The only economic data released overnight was U.S Core Durable Goods Orders which came in at a very flat 0.1% and continued a theme of weak business investment over the past 6-12 months. Business investment is typically seen as a sign of the health of the U.S economy as businesses invest in future demand for their products and services. Continued weak numbers could suggest that the end of this 10 year+ business cycle could be close.

AUD EXCHANGE RATES:

AUD/USD – 0.7231

AUD/GBP – 0.5652

AUD/EUR – 0.6347

AUD/NZD – 1.0599

AUD/JPY – 81.831

USD/BTC – $4,395

OTHER MARKETS:

All Ords (XAO) – 5,722

Gold – A$1,688/oz

Silver –  A$19.95/oz

WTI – US$54.51/barrel

DATA RELEASES TODAY:

None

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Topics: Market, Report

Market Update - 21st November 2018 - Markets & Commodities Slide For a Second Day, AUD Continues To Be Dragged Down

Posted by Patrick Downes on November 21, 2018 at 8:46 AM

Further declines across U.S and European equities overnight headline a rout across almost all markets as risk aversion once again takes a front seat. Traders sold down the AUD and commodities along with Bitcoin which slid a whopping 10% overnight following falls of about 15% the day before. U.S tech stocks seem to have been the catalyst for this most recent correction, while Trump's outgoing trade war with China has weighed on global growth projections and asset prices all year.

AUD/USD which had started to look reasonably bullish on the charts last week is now looking less so, following the past couple of nights of selling. However, if there is one thing we do know about market sentiment it's that it is a swing and tends to move back and forth with news flow. So it's entirely conceivable at some point this week markets swing back the other one as they go 'hang on, why are we selling when the fundamentals of growth are still in place, China, India and SE Asia are driving global growth and commodities are just starting to come out of a 5 year bear market'.

No economic data out today, but we do have U.S Core Durable Goods orders just after midnight.

AUD EXCHANGE RATES:

AUD/USD – 0.7188

AUD/GBP – 0.5613

AUD/EUR – 0.6317

AUD/NZD – 1.0596

AUD/JPY – 81.091

USD/BTC – $4,329

OTHER MARKETS:

All Ords (XAO) – 5,759

Gold – A$1,692/oz

Silver –  A$19.83/oz

WTI – US$53.24/barrel

DATA RELEASES TODAY:

USD - Core Durable Goods Orders m/m at 12.30am (tomorrow morning)

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Topics: Market, Report

Market Update - 20th November 2018 - FAANGs Get Whacked & Drag Down AUD

Posted by Patrick Downes on November 20, 2018 at 8:37 AM

Financial markets had a brief respite from the selling last last week which helped the AUD make solid strides hitting a high of around 0.7330 vs. the Greenback in the early hours of Saturday morning, while Brexit issues have seen AUD/GBP surge to 6 month highs just shy of 0.5700. While AUD/GBP has held onto those gains, unfortunately though, AUD/USD has now come back to around the mid 0.72's following some further savage selling across both U.S and European equities overnight. The NASDAQ was again the biggest detractor falling by a whopping 3.03% which took the so called FAANG (Facebook, Amazon, Apple, Netflix and Google) stocks to their lowest levels in about a year. Local equities are expected to open around 0.2% lower this morning as a result.

Ahead today we have Monetary Policy Meeting Minutes from the latest RBA meeting at 11.30am, followed by Inflation Report Hearings out of the U.K at around 9.00pm this evening. Both sets of data could provide some volatility for the AUD and AUD/GBP respectively, so those importers with AUD exposures would be best to hedge ahead of the data or risk adverse movements in the AUD.

Back to the AUD and some forecasts popping up over the past few days suggest we may have bottomed out with respect to AUD/USD but gains so far from the lows have been quite modest. I have seen some predictions on sites like Bloomberg et al that 0.7600 could be in the realm of possibility in the next 6-12 months. Obviously while bullish forecasts are great for importers please consider these are just predictions and the best strategy is to continue to hedge around your costing levels and ensure your importing remains profitable.

AUD EXCHANGE RATES:

AUD/USD – 0.7261

AUD/GBP – 0.5632

AUD/EUR – 0.6337

AUD/NZD – 1.0634

AUD/JPY – 81.758

USD/BTC – $4,870

OTHER MARKETS:

All Ords (XAO) – 5,786

Gold – A$1,678/oz

Silver –  A$19.78/oz

WTI – US$57.27/barrel

DATA RELEASES TODAY:

AUD – Monetary Policy Minutes at 11.30am

GBP – Inflation Hearings at 9.00pm

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Topics: Market, Report

Market Update - 15th November 2018 - AUD Edges Higher, But What Caused Bitcoin's Sudden Decline

Posted by Patrick Downes on November 15, 2018 at 8:46 AM

The AUD ticked marginally higher overnight vs all of the majors following flat wages growth yesterday, however the focus this morning is what caused Bitcoin to wake from its two month slumber and tumble over 10% in half an hour very early this morning. Speculation is that one of the bigger wallets may have sold their holding in favour of Bitcoin Cash (a Bitcoin fork and Bitcoin competitor), while other theories suggest more sinister motives like price manipulation etc. Bitcoin being such an illiquid, tightly held and small market suggests none of this is really out of the ordinary or even matters to financial markets more broadly which shrugged off the sudden decline in Bitcoin. The DXY or U.S Dollar index barely moved, while U.S equities finished the session around 0.76-0.90% lower, with the Nasdaq the worst performer yet again.

Commodity and Energy prices improved helping to support the AUD's modest gains overnight while more local economic data is due out this morning at 11.30am in Employment Change and the official Unemployment Rate. The market is anticipating around 20,000 new jobs to have been created, while the Unemployment Rate is tipped to have rise very marginally from 5.0% to 5.1%. This shouldn't impact the AUD too much, however a really strong or really poor number certainly will impact the AUD - so keep an eye on markets around 11.30am.

UK and U.S retail sales figures are out tonight.

AUD EXCHANGE RATES:

AUD/USD – 0.7203

AUD/GBP – 0.5533

AUD/EUR – 0.6361

AUD/NZD – 1.0616

AUD/JPY – 81.851

USD/BTC – $5,518

OTHER MARKETS:

All Ords (XAO) – 5,822

Gold – A$1,674/oz

Silver –  A$19.55/oz

WTI – US$56.40/barrel

DATA RELEASES TODAY:

AUD – Employment Change at 11.30am

GBP – Retail Sales m/m at 8.30pm

USD – Core Retail Sales m/m at 12.30am (tomorrow morning)

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Topics: Market, Report

Market Update - 14th November 2018 - NAB Business Confidence Disappoints Again, Wages Index At 11.30am

Posted by Patrick Downes on November 14, 2018 at 8:16 AM

NAB Business Confidence disappointed once again yesterday morning, coming in at 4, below the previous months reading and continuing a trend of declines which began way back in May 2017 when NAB Business Confidence peaked at 13. The soft Business Confidence numbers coincide with stubbornly poor retail sales figures, concerns about global growth and trade, tight credit and a quickly deteriorating local housing market which is unfortunately all dragging on our economy and the Aussie Dollar. The AUD is typically a currency that outperforms when optimism is high and growth strong, but right now we are seeing the opposite hence the AUD's decline over the better part of this year. In fact since late January we have dropped a full 900 points or 9 cents vs. the Greenback from 0.8100 to about 0.7200.

Overnight the AUD held up reasonably well finishing a tad higher vs. the Greenback than this time yesterday. U.S equities finished mostly lower by about 0.2%, while the NASDAQ followed Europe to finish higher. The German DAX was the best performer in Europe ending the session 1.3% higher. Commodities prices mostly held their ground excluding energy prices which were led lower by a rout in oil prices that saw WTI wipe around US$5 a barrel off its price. Expect the Saudis and OPEC to cut production and boost prices as the Saudi's look to increase the price of oil leading up to their IPO of Aramco in 2021.

The latest Wage Price Index is due out this morning at 11.30am with Aussie economists expecting to see flat growth in wages of about 0.6% for the latest quarter. Wages growth has been in decline since the GFC around 2008 when we averaged about a 1% increase in our salaries quarterly but in the space of 10 years we've seen that growth decline by about half as China slows and the great mining super cycle came to an end in the early part of this decade.

I like to be optimistic about things and think that this perfect storm of low wages growth, soft retail sales and deteriorating housing market is our economy bottoming out, sort of like being in the trough in a cycle with the climb to the peak ahead. Better times are certainly coming and the RBA agree with their forecasts continually ticking higher with each meeting.

AUD EXCHANGE RATES:

AUD/USD – 0.7178

AUD/GBP – 0.5529

AUD/EUR – 0.6362

AUD/NZD – 1.0639

AUD/JPY – 81.713

USD/BTC – $6,263

OTHER MARKETS:

All Ords (XAO) – 5,922

Gold – A$1,665/oz

Silver –  A$19.39/oz

WTI – US$55.19/barrel

DATA RELEASES TODAY:

AUD - Wage Price Index q/q at 11.30am

GBP - CPI y/y at 8.30pm

USD - Core CPI m/m at 12.30am (tomorrow morning)

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Topics: Market, Report

Market Update - 13th November 2018 - Investors Pile Into Greenback & Yen As Equities Take Another Hit

Posted by Patrick Downes on November 13, 2018 at 8:34 AM

Safe haven assets including the Yen and the Greenback performed well overnight as investors looked to protect themselves from declines across equities markets and commodities. U.S equities were led lower by the tech heavy NASDAQ which fell 2.7%, while in Europe stocks also declined with the DAX down the most, falling 1.77%. Overall it was a night to forget for equities and our local market is set to open 1.2% lower this morning.

AUD/USD which had briefly last week tested 0.7300 is now off by nearly 2% from those highs and seemingly looking vulnerable once again as investors retreat into their shells amidst trade ware fears and concerns about global growth. Iron ore prices which have been a good indicator for the AUD, remain elevated and near the highest levels since March, which does bode well for our local commodities stocks.

NAB Business Confidence is out today at 11.30am. Last months reading was 6 with the trend has been in decline ever since May 2017 when we hit 13. UK Average Earnings Index is released at 8.30pm with economists predicting a slight increase in wages in the U.K.

AUD EXCHANGE RATES:

AUD/USD – 0.7147

AUD/GBP – 0.5554

AUD/EUR – 0.6363

AUD/NZD – 1.0659

AUD/JPY – 81.381

USD/BTC – $6,302

OTHER MARKETS:

All Ords (XAO) – 6,027

Gold – A$1,673/oz

Silver –  A$19.52/oz

WTI – US$59.13/barrel

DATA RELEASES TODAY:

AUD - Nab Business Confidence at 11.30am

GBP - Average Earnings Index at 8.30pm

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Topics: Market, Report

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