Compass Global Markets' Blog

21st January 2021: Unemployment Rate down at 6.6%

Posted by Thomas Su on January 21, 2021 at 12:08 PM

Labour Force, Australia

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18th December 2020: Unemployment Rate down to 6.8%

Posted by Thomas Su on December 18, 2020 at 1:00 PM

Labour Force, Australia

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3rd November 2020: RBA Announcement Cash Rate - cut to 0.1%

Posted by Thomas Su on November 3, 2020 at 2:54 PM

Statement by Philip Lowe, Governor: Monetary Policy Decision

At its meeting today, the Board decided on a package of further measures to support job creation and the recovery of the Australian economy from the pandemic. With Australia facing a period of high unemployment, the Reserve Bank is committed to doing what it can to support the creation of jobs. Encouragingly, the recent economic data have been a bit better than expected and the near-term outlook is better than it was three months ago. Even so, the recovery is still expected to be bumpy and drawn out and the outlook remains dependent on successful containment of the virus.

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Market Update - 21st October 2020 - All Eyes On Huge U.S Stimulus Bill

Posted by Patrick Downes on October 21, 2020 at 9:06 AM

Please note that the commentary below is factual information provided to a group of readers as a web blog, and where an opinion is expressed by the author, it is GENERAL ADVICE only.

Nancy Pelosi Stimulus Package:

Focus shifts to the U.S this week where the market is hoping to see a huge stimulus package agreed on between Nancy Pelosi/House Democrats and the Trump Administration. The House of Reps led by the Democrats have already passed $2.2 trillion in spending, but the bill is stuck with Mitch McConnell and Senate Republicans who are holding up the stimulus package for political reasons. Negotiation's are ongoing and it's understood that Republicans have suggested $1.9 trillion as a number they'd support. Should Dems agree the package could become law as soon as this weekend and it would provide a huge shot in the arm for the ailing U.S economy that has been ravaged by Covid. The bill would likely also spur stock markets and risk assets such as the Aussie Dollar.

AUD Creeping Lower: 

The Aussie Dollar fell with U.S equities yesterday and is off around half a percent across the board since my last morning report on Monday. As suggested above U.S stimulus negotiations are the biggest catalyst for the Aussie Dollar this week and markets more broadly, as such their isn't a great deal to talk about.

UK CPI is due out tonight, followed by a speech from ECB President Lagarde.

The local stock market had a bad day yesterday, but a positive finish on Wall Street overnight sets us up for a better day today.

AUD EXCHANGE RATES:

AUD/USD – 0.7010

AUD/GBP – 0.5413

AUD/EUR – 0.5930

AUD/NZD – 1.0683

AUD/JPY – 74.029

OTHER MARKETS:

All Ords (XAO) – 6,396

Gold – A$2,706/oz

Silver –  A$35.01/oz

Oil – US$41.23 barrel

DATA RELEASES TODAY:

GBP - UK CPI due at 5:00pm

EUR – ECB President Lagarde Speaks at 6:30pm

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Topics: Report, Market

Market Update - 19th October 2020 - AUD Consolidates Above 0.7000 As Victorian Restrictions Ease

Posted by Patrick Downes on October 19, 2020 at 9:17 AM

Please note that the commentary below is factual information provided to a group of readers as a web blog, and where an opinion is expressed by the author, it is GENERAL ADVICE only.

AUD Holding Above 0.7000:

Since Covid kicked off in March, AUD/USD has traded as low as 0.55 and as high as 0.74, highlighting just how volatile markets have been this year. More recently, we've settled above 0.70 thanks to Australia having again been one of the best performing economies during a crisis, you'll all remember the same thing played out during the GFC (cleanest shirt in the dirty laundry and no recession). Versus all the other major currencies the AUD has displayed a similar pattern, initially crushed in March only to rally consistently through the remainder of the year. AUD/EUR and AUD/GBP are currently above 0.60 and 0.54 respectively.

Where are we heading?

Well, that is the million dollar question and if I could predict it with any certainty I'd have a one way ticket to eternal riches. But the truth is, Australia has weathered the Covid storm particularly well, case numbers have never really got out of hand other than in my home state of Victoria (max 700+ a day). But Vic is coming out the other end and with that we should see a solid amount of optimism and growth in this region. The lifting of border restrictions between the states should follow and with that domestic travel should boom as an alternative to international travel - all of this is bullish for the Aussie economy and the AUD. The RBA has been particularly accommodative and has a clear mandate to keep rates low via a form of Aussie Q.E and direct intervention via their monthly cash rate decision - currently rates are on hold at 0.25% but expectations are that we could see another shot in the arm with a rate cut to 0.10% or something similar.

I remain pretty optimistic (as I always am) and think the worst is behind us. Both state and federal government stimulus in the hundreds of billions of dollars sets us up well for the coming years and growth shouldn't be too hard to come by via a booming domestic and consumer driven economy.

Vaccine Rolls Out In China:

In China, a vaccine for SARS-CoV-2 has started to be deployed across the country. The vaccine is safe and triggers the antibody response and can be taken at any of the major hospitals across the country. This bodes well for the trials by Astra Zeneca in the U.K and those in other parts of the world including the U.S.

AUD EXCHANGE RATES:

AUD/USD – 0.7044

AUD/GBP – 0.5442

AUD/EUR – 0.6003

AUD/NZD – 1.0711

AUD/JPY – 74.214

OTHER MARKETS:

All Ords (XAO) – 6,385

Gold – A$2,682/oz

Silver –  A$34.12/oz

Oil – US$40.94 barrel

DATA RELEASES TODAY:

CNY - GDP q/y at 1:00pm

USD - Fed Chair Powell Speaks at 11:00pm

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Topics: Report, Market

4th August 2020: RBA Announcement Cash Rate - held at 0.25%

Posted by Thomas Su on August 4, 2020 at 2:41 PM

Statement by Philip Lowe, Governor: Monetary Policy Decision

At its meeting today, the Board decided to maintain the current policy settings, including the targets for the cash rate and the yield on 3-year Australian Government bonds of 25 basis points.

The global economy is experiencing a severe contraction as countries seek to contain the coronavirus. Even though the worst of this contraction has now passed, the outlook remains highly uncertain. The recovery is expected to be only gradual and its shape is dependent on containment of the virus. While infection rates have declined in some countries, they are still very high and rising in others. International trade remains weak, although there has been a strong recovery in industrial activity in China over recent months.

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Market Update - 21st July 2020 - AUD Continues To Edge Higher As Economy Opens Up

Posted by Patrick Downes on July 21, 2020 at 9:06 AM

Please note that the commentary below is factual information provided to a group of readers as a web blog, and where an opinion is expressed by the author, it is GENERAL ADVICE only.

AUD Edges Higher:

The Aussie Dollar has inched higher over the past week, surpassing 0.7000 vs. the Greenback for the second or third time since early June. Despite low interest rates and a persistent lock-down in Victoria, we are seeing a pattern emerge similar to past crisis, with the most recent GFC springing to mind. During the GFC, the AUD which initially fell, went on to be one of the best performing G20 currencies eclipsing the USD in value in within a couple of years. In fact AUD/USD fell to 0.6000 before rallying to 1.1000. While I'm not saying the same thing is destined to occur again, we are certainly performing far better in the battle against Covid than many other G20 countries and that has seen the local currency surge in value since March.

Stocks Bid Up: 

The stock market has also been a beneficiary of free flowing money from central banks and government's across the globe, with the best performing sectors being bio-tech, gold and technology stocks. Tech stocks are benefiting from the shift to online shopping, bio-tech is benefiting from the search for Covid remedies and Gold is surging in value as a result of money printing.

RBA Governor Philip Lowe is due to deliver a speech titled "Covid-19: The Labor Market and Public-sector Balance Sheets" at the Anika Foundation Luncheon and we should therefore hear quite a bit on the RBA's thoughts about where the labour market is headed, unemployment numbers and more. There is probably quite a bit for Lowe to cover and it'll be interesting to follow some of the press following the speech.

AUD EXCHANGE RATES:

AUD/USD – 0.6986

AUD/GBP – 0.5511

AUD/EUR – 0.6100

AUD/NZD – 1.0638

AUD/JPY – 74.955

OTHER MARKETS:

All Ords (XAO) – 6,112

Gold – A$2,589/oz

Silver –  A$28.35/oz

Oil – US$39.81 barrel

DATA RELEASES TODAY:

AUD - RBA Gov Lowe Speaks at 12.30pm

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Topics: Report, Market

Market Update - 14th July 2020 - AUD In Holding Pattern Since June, Stocks Performing Well

Posted by Patrick Downes on July 14, 2020 at 8:38 AM

Please note that the commentary below is factual information provided to a group of readers as a web blog, and where an opinion is expressed by the author, it is GENERAL ADVICE only.

AUD Stable:

Despite fresh lock-downs across Victoria and caution across other states, the AUD has remained reasonably stable throughout. For the better part of a month and a half AUD/USD has traded in a 2 cent range between 0.68 and 0.70 and a similar pattern has emerged for AUD/EUR and AUD/GBP with both trading in reasonably tight ranges since the start of June.

Real unemployment is high across the country, but JobKeeper/Seeker payments have kept businesses afloat and allowed individuals in affected industries (like retail/travel and tourism) to keep picking up a pay check. This has essentially deferred for the time being the worst impacts of Covid19 lock-downs. Markets are obviously still pricing in good outcomes and this is evident by a booming stock market (ASX All Ords back above 6,000) and the Aussie Dollar back at pre-Covid19 levels. I remain cautiously optimistic that the worst is behind us.

Local Stocks:

The local stock market is tipped to open in the red today following the lead from Wall Street which finished flat or lower - the Nasdaq was the worst performer down over 2% as investors took profits on high flying tech stocks.  European stocks performed better up well over 1% across the board. U.S stock futures as they stand right now at 8.33am are showing somewhat of a positive reversal, which may bode well for the local market today.

No economic data is due out today, however we have a bank holiday in France tonight.

AUD EXCHANGE RATES:

AUD/USD – 0.6912

AUD/GBP – 0.5496

AUD/EUR – 0.6087

AUD/NZD – 1.0580

AUD/JPY – 74.200

OTHER MARKETS:

All Ords (XAO) – 6,089

Gold – A$2,596/oz

Silver –  A$27.52/oz

Oil – US$39.81 barrel

DATA RELEASES TODAY:

No economic data

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Topics: Report, Market

Market Update - 8th July 2020 - Equities & AUD Slide As Victoria Enters A Second Lockdown

Posted by Patrick Downes on July 8, 2020 at 8:22 AM

Please note that the commentary below is factual information provided to a group of readers as a web blog, and where an opinion is expressed by the author, it is GENERAL ADVICE only.

Good morning all. I've been a little slack and irregular of late with my morning reports, managing to get maybe one or two out per week recently. I blame Covid disruptions for the lack of consistency and have set a goal to put out a report on a more consistent basis, perhaps every second business day, as a minimum.

Equities Slide:

Markets fell across both Europe and the U.S overnight following a weak lead from Asian stocks yesterday. U.S stock indices dipped as much as 1.51%, with the Dow the worst performer, while in Europe the UK FTSE led the declines down 1.53% at the close. The falls across equity markets not surprisingly rubbed off on the AUD, with AUD/USD again failing to push through 0.7000 which has become a key level of resistance. AUD/USD is now down around 1% from yesterdays highs. It's a similar story for AUD/GBP which is down 1%, while the Aussie has held it's ground vs. the EURO.

No economic data is due out today, as such Covid news flow is again likely to guide markets. The shutting down of the Victorian economy for a second time is likely to be a drag on the ASX today as news filters through and market participants tread cautiously.

AUD EXCHANGE RATES:

AUD/USD – 0.6911

AUD/GBP – 0.5504

AUD/EUR – 0.6130

AUD/NZD – 1.0576

AUD/JPY – 74.377

OTHER MARKETS:

All Ords (XAO) – 6,126

Gold – A$2,583/oz

Silver –  A$26.28/oz

Oil – US$40.42 barrel

DATA RELEASES TODAY:

No economic data

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Topics: Report, Market

7th July 2020: RBA Announcement Cash Rate - held at 0.25%

Posted by Thomas Su on July 7, 2020 at 2:54 PM

Statement by Philip Lowe, Governor: Monetary Policy Decision

At its meeting today, the Board decided to maintain the current policy settings, including the targets for the cash rate and the yield on 3-year Australian Government bonds of 25 basis points.

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