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.
Despite a reasonably good showing among equity markets this week, the Aussie Dollar has not been able to hold ground, instead succumbing yesterday to further falls as a result of a spike in the unemployment rate and soft jobs number. The poor employment figures suggest another interest rate cut from the RBA is likely, which would boost an already expensive housing market, but add further weight to a sinking AUD. The triple whammy of a slowing economy, weak income growth and now coronavirus virus really have made any solid AUD rally unlikely in the short term. Forward Contracts remain the best bet to hedge any open AUD positions.
Equities & Commodities:
U.S and European stocks mostly fell overnight while commodities prices continue to face headwinds, the Zinc price is down 40% since Trump started his trade war with China, while Lead is down 30% and Copper down 20% in the same period. The metals which have bucked the trend are Gold (no surprised there as its a safety trade) and Iron Ore. Our exporters should be posting massive profits, but low commodities prices are offsetting the boon from a very low AUD.
European, German and U.K Flash Manufacturing and Services PMI are all due this evening, so expect volatility in AUD/EUR and AUD/GBP.
AUD EXCHANGE RATES:
AUD/USD – 0.6584
AUD/GBP – 0.5103
AUD/EUR – 0.6102
AUD/NZD – 1.0411
AUD/JPY – 73.822
All Ords (XAO) – 7,255
Gold – A$2,448/oz
Silver – A$27.76/oz
WTI – US$53.72 barrel
DATA RELEASES TODAY:
EUR - French & German Flash Manufacturing PMI at 7.15pm
EUR - French & German Flash Services PMI at 7.15pm
GBP – UK Flash Manufacturing & Services PMI at 8.30pm