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 Whipsaws On Data:
The Aussie Dollar whipsawed back and forth yesterday initially falling around half a percent following more poor retail sales data which saw shoppers decrease their spending by nearly half a percent during the key December shopping month. However that bad news which dragged on the Aussie Dollar through the morning was followed by a more upbeat than expected RBA in the afternoon, who suggested inflation and growth remain on target and as a result suggested there would likely be no need to cut interest rates in the foreseeable future. This helped the AUD to do a complete U-turn turning a half a percent down-day into half a percent of gains in a matter of minutes. The market was clearly expecting the RBA to capitulate and start telegraphing an interest rate cut, which they did not.
BRC Recommendations Boost For Banks:
The findings from the Banking Royal Commission (BRC) delivered after the bell Monday afternoon had the result of pushing local bank stocks higher during yesterday's trade. Local bank stocks moved higher as opposed to lower as the consensus view from the market was that the BRC recommendations would likely benefit the banks at the detriment of the mortgage broking industry. However there are probably still issues of trust which the banks need to rebuild along with digging through the over 70 recommendations from the BRC; as such the impressive moves yesterday could well be short lived.
Ahead today is a speech from RBA Governor Phillip Lowe around midday followed by Trump's state of the union speech around 1pm AEST.
AUD EXCHANGE RATES:
AUD/USD – 0.7203
AUD/GBP – 0.5552
AUD/EUR – 0.6308
AUD/NZD – 1.0462
AUD/JPY – 79.215
All Ords (XAO) – 6,068
Gold – A$1,817/oz
Silver – A$21.92/oz
WTI – US$53.88/barrel
DATA RELEASES TODAY:
China – Bank Holidays all week (no payments processed)
AUD – RBA Gov Lowe Speaks at 12.30pm
USD - President Trump Speaks at 1.00pm
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Senior Corporate FX Dealer
Phone Patrick - 0431 278 632
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