Compass Global Markets' Blog

Market Update - 6th February 2019 - AUD Whipsawed By Economic Data, Moves Slightly Higher

Posted by Patrick Downes on February 6, 2019 at 8:33 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 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: 

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

OTHER MARKETS:

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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Patrick Downes

Senior Corporate FX Dealer

Phone Patrick - 0431 278 632 

  Email Patrick: patrick@compassmarkets.com

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 DISCLOSURE AND DISCLAIMER - GENERAL ADVICE WARNING
The information provided in this report has been prepared without taking into account your particular objectives, financial situation or needs. You should consider whether our products are appropriate for you and read the FSG and PDS which are available on this website.
This report and must not be copied, either in whole or in part, or distributed to any other person.
All references to prices, amounts and currency are in Australian dollars unless otherwise noted.
This report is provided for Australian residents only and is not intended for use by residents of any other country.

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