Compass Global Markets' Blog

Market Update - 23th April 2019 - AUD Slips Amid Light Liquidity Following Easter Break

Posted by Patrick Downes on April 23, 2019 at 7:50 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.

I hope you all had a lovely long weekend and I've heard rumours some are taking this week off as well to turn it into an extra long break. Good on them. We all work way too hard!

AUD Lower:

Currency markets reopened yesterday morning but reopened with the absence of most G20 nations who celebrate the Easter Break, as such officially today is when currency markets regain the majority of their liquidity. The AUD has opened up around half a percent lower across the board, with the exception of the NZD, which we've continued to make gains against. AUD/USD remains above 0.7100 on the inter-bank market with 0.7200 a level we simply cannot break. Attempts have been made since late January, but all to no avail with an inevitable sell off occuring whenever we reach the 0.7200 figure.

Upcoming Data:

No data is out today and light liquidity is expected to persist until Europe and the U.S come back online later this evening. Aussie CPI figures are due tomorrow ahead of the ANZAC Day holiday, with local import prices and U.S Advance GDP rounding out the week on Friday.

AUD EXCHANGE RATES:

AUD/USD – 0.7103

AUD/GBP – 0.5462

AUD/EUR – 0.6304

AUD/NZD – 1.0645

AUD/JPY – 79.525

OTHER MARKETS:

All Ords (XAO) – 6,349

Gold – A$1,787/oz

Silver –  A$21.04/oz

WTI – US$65.65/barrel

DATA RELEASES TODAY:

No Data

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Topics: Report, Market

Market Update - 15th April 2019 - AUD Continues To Creep Higher On Positive Sentiment

Posted by Patrick Downes on April 15, 2019 at 8:35 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, hope you all had a lovely weekend. I certainly did, was in Healesville yesterday for lunch at Giant Steps before visiting a nice walking track near Badgers Creek. Fantastic scenery around that area.

AUD Higher:

Anyway, the Aussie Dollar has continued it's good run moving higher more or less across the board with the exception of AUD/EUR which declined ever so slightly. The good run for the AUD stems from generally higher optimism among market participants with equities also doing remarkably well since the start of the year. In fact the ASX 200 gained 9.5% in the first quarter marking the best quarter for the ASX 200 since September 2009.

Upcoming Data:

No economic data is out today, however RBA Monetary Policy Minutes are due tomorrow around midday. Chinese GDP figures are due Wednesday, while Thursday will see the latest employment figures for the local economy - the unemployment rate is tipped to rise slightly to 5% from 4.9%.

AUD EXCHANGE RATES:

AUD/USD – 0.7146

AUD/GBP – 0.5456

AUD/EUR – 0.6317

AUD/NZD – 1.0569

AUD/JPY – 80.059

OTHER MARKETS:

All Ords (XAO) – 6,347

Gold – A$1,799/oz

Silver –  A$20.89/oz

WTI – US$63.66/barrel

DATA RELEASES TODAY:

None.

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Topics: Report, Market

Market Update - 11th April 2019 - AUD Moves Higher With Robust Commodities Prices & Positive Sentiment

Posted by Patrick Downes on April 11, 2019 at 8:26 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 Moves Higher:

We finally saw some AUD action overnight thanks to positive sentiment and strong commodities prices which have finally flowed through to a higher AUD. AUD/USD broke and held through 0.7100, while AUD/EUR is sitting pretty around the mid 0.63's mark. As has been the case lately and as I've said a few times to many of my clients: Importers would be wise to take these opportunities when the AUD moves higher, a bird in the hand is better than two in the bush. And while I understand the thought that what if AUD goes a little higher, keep in mind what if it fails here and drifts lower once again.

Westpac Consumer Sentiment Stronger:

In terms of data released yesterday, it was generally more optimistic data. We saw a jump in Westpac Consumer Sentiment, while in the UK manufacturing and industrial production PMI improved. Europe kept interest rates on hold at 0.00%, a full 1.5% below our own RBA set interest rates. CPI in the U.S grew, but stripping out energy and food we saw a flat reading at 0.1% for the month. Overall the global economy remains in growth but it's slow and meandering growth, where in the world the next tidal wave of growth happens is anyone's guess but India should be at the top of that list.

Chinese CPI Due:

Ahead today is Chinese CPI and U.S Producer Prices. Chinese CPI is the big one and a strong number should support commodities prices and the AUD. A poor number could see us drift off again.

Final note for importers: AUD is up, think about covering some of your foreign currency exposures. 

AUD EXCHANGE RATES:

AUD/USD – 0.7137

AUD/GBP – 0.5445

AUD/EUR – 0.6326

AUD/NZD – 1.0561

AUD/JPY – 79.226

OTHER MARKETS:

All Ords (XAO) – 6,316

Gold – A$1,824/oz

Silver –  A$21.25/oz

WTI – US$64.45/barrel

DATA RELEASES TODAY:

CNY - CPI at 12.30pm

USD - PPI at 11.30pm

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Topics: Report, Market

Market Update - 10th April 2019 - Groundhog Day, AUD Hasn't Moved

Posted by Patrick Downes on April 10, 2019 at 8:37 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.

Believe it or not the AUD is not a single point different from yesterday's figures at the same time. Obviously we still had a bit of volatility throughout the past 24 hours, but I'm literally seeing the same numbers and I have to admit I have never seen that before. Quite an anomaly, but I digress.

Home Loans & Equities:

So what's happened over the past 24 hours? Well we saw the release of home loans data yesterday, which showed a little life with growth in home loans at 2% month on month and following a string of heavy falls in the previous 3 months. We haven't strung two positive months together since the boom times of 2017. Overnight we saw no real news or economic data, however U.S and European equities declined as market participants took profits and a breather from a pretty solid stretch of gains since the start of 2019. Whether or not those gains continue is anyone's guess, but a run like that always sees eventual profit taking.

Economic Data: 

A fair bit of economic data is out over the next 24 hours, with Westpac Consumer Sentiment at 11.30am, followed by UK GDP, European Interest Rates, U.S CPI tonight and the Fed's FOMC statement early tomorrow morning. AUD will likely have moved tonight given the upcoming data, however which way depends alot on sentiment and Jerome Powell's FOMC statement at 5.00am.

AUD EXCHANGE RATES:

AUD/USD – 0.7093

AUD/GBP – 0.5426

AUD/EUR – 0.6294

AUD/NZD – 1.0535

AUD/JPY – 78.961

OTHER MARKETS:

All Ords (XAO) – 6,315

Gold – A$1,830/oz

Silver –  A$21.37/oz

WTI – US$64.21/barrel

DATA RELEASES TODAY:

AUD - Westpac Consumer Sentiment at 11.30am

GBP - GDP m/m at 7.30pm

EUR - Monetary Policy Statement and Interest Rate Decision at 10.45pm

USD - CPI at 11.30pm

USD - FOMC Meeting Minutes at 5.00am (tomorrow morning)

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Topics: Report, Market

Market Update - 9th April 2019 - AUD Supported By Robust Commodities Prices

Posted by Patrick Downes on April 9, 2019 at 8:30 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.

The Aussie Dollar is little changed since last week. AUD/USD has been trading in a tight range between 0.7000 and 0.7150 on the wholesale market, while AUD/GBP continues to be the mover and shaker trading in a 200 point range between 0.5300 and 0.5500 on the top side. Brexit uncertainty remains the catalyst for any moves in AUD/GBP with a second referendum now just as likely as a hard Brexit - anyone's guess how this one ends up.

Commodities Flying: 

Commodity prices have been led higher again by iron ore prices, which surged to their highest point since March 2017. Iron Ore on the Chinese Dalian Futures market hit nearly 140AUD a tonne yesterday signifying huge profit margins for most iron ore miners at current levels. Zinc and Copper prices have also been moving higher so with all three major base metals performing well along with robust Oil and Coal prices things are looking really good for the budget bottom line over the next few years.

RBA Uncertainty: 

There is still quite a bit of uncertainty about the Reserve Bank Of Australia's likely next move with respect to interest rates, with some recent data and comments from the RBA giving the impression that perhaps interest rate cuts are not a given. Certainly the AUD holding above 0.7000 is also an indication of this. No data out today.

AUD EXCHANGE RATES:

AUD/USD – 0.7093

AUD/GBP – 0.5421

AUD/EUR – 0.6294

AUD/NZD – 1.0535

AUD/JPY – 79.128

OTHER MARKETS:

All Ords (XAO) – 6,310

Gold – A$1,822/oz

Silver –  A$21.42/oz

WTI – US$64.32/barrel

DATA RELEASES TODAY:

None

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Topics: Report, Market

Market Update - 5th April 2019 - AUD Has Sea-sawing Week Ahead Of U.S Non-Farms Tonight

Posted by Patrick Downes on April 5, 2019 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.

Stocks Mixed: 

U.S & European stocks finished the overnight session mixed as Trump appeared to telegraph a completion to China/U.S trade talks while in the U.K and Europe Brexit talks continued without a resolution. At the close the Dow Jones was the best performer up 0.64%, while the biggest detractor was the U.K FTSE which finished 0.22% lower.

AUD Seesaw:

The AUD has had a busy week. AUD/USD specifically has traded between a low of 0.7050 and a high of 0.7130 thanks to a raft of data in which we've seen weak business confidence but stronger commodity prices, a spike in building approvals but still declining house prices. But the good news for importers perhaps is that the RBA at it's latest meeting didn't directly telegraph any rates cuts this year from the current 1.5% benchmark, this should keep the AUD supported around current levels. Ofcourse, further equities market turmoil in the U.S, Europe or elsewhere could jolt that calm and see the AUD lower, as such importers needing to hedge their 2019 USD, EUR and GBP exposures would be wise to do so.

U.S Jobs:

U.S Non-Farm employment or just employment numbers are due out this evening. The U.S unemployment rate is expected to remain steady at 3.8%, with about 175,000 jobs created.

Other than that not much further data out today, have a great weekend.

AUD EXCHANGE RATES:

AUD/USD – 0.7080

AUD/GBP – 0.5403

AUD/EUR – 0.6307

AUD/NZD – 1.0490

AUD/JPY – 79.089

OTHER MARKETS:

All Ords (XAO) – 6,320

Gold – A$1,816/oz

Silver –  A$21.30/oz

WTI – US$62.21/barrel

DATA RELEASES TODAY:

USD - Non-Farm Employment and Unemployment Rate at 11.30pm

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Topics: Report, Market

Market Update - 3rd April 2019 - RBA Leave Rates On Hold At 1.5%

Posted by Patrick Downes on April 3, 2019 at 9:02 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.

Not a great deal to report on today, however I have noticed that on yesterdays Morning Report I included the date as the 4th of April 2019. I must have been half asleep, as it was clearly the 2nd.

RBA Meeting:

Anyhow, the RBA met yesterday and surprise surprise...they did nothing yet again leaving rates on hold at 1.5% for a 29th consecutive month. The RBA noted that "further progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual." This to me sounds like steady as she goes and don't expect any rate cuts from the RBA, however the fall in the AUD since the announcement suggests the opposite.

Good news yesterday was that U.S manufacturing data improved, following the lead of China's improvements on Monday. Stocks in the U.S finished mixed, while European equities powered ahead.

AUD EXCHANGE RATES:

AUD/USD – 0.7037

AUD/GBP – 0.5352

AUD/EUR – 0.6278

AUD/NZD – 1.0431

AUD/JPY – 78.400

OTHER MARKETS:

All Ords (XAO) – 6,327

Gold – A$1,827/oz

Silver –  A$21.38/oz

WTI – US$62.60/barrel

DATA RELEASES TODAY:

AUD – Retail Sales m/m at 11.30am

AUD – Trade Balance at 11.30am

USD - ADP Non-Farm Employment Change at 11.15pm

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Topics: Report, Market

Market Update - 2nd April 2019 - U.S & European Stocks Follow Strong Lead From Asia

Posted by Patrick Downes on April 2, 2019 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.

Stocks Buoyant:

Stocks in Europe and the U.S moved higher in overnight trade following the positive lead set by Asian stocks yesterday. The Chinese CSI 300 added 2.62% and the Japanese Nikkei added 1.43% yesterday, while U.S stocks added between 1.1% and 1.3% overnight. The good moves in stock and commodities prices were kicked off yesterday with better than expected Chinese Caixin Manufacturing PMI, which came in at 50.8, it's highest level since August last year.

ISM Data Better:

Overnight we also saw the release of U.S economic data, with ISM Manufacturing PMI beating the previous months reading and appearing also to level off after a period of decline during late 2018. The Aussie Dollar is little changed, however commodity prices have been well supported, which will continue to boost Australian tax receipts from our mining sector.

Cash Rate Decision at 2.30pm:

More local data due out today with Building Approvals at 11.30am, followed by the all important cash rate decision at 2.30pm. Following that, we will also see Josh Frydenberg's Annual Budget tonight.

Our local index should open around half a percent higher.

AUD EXCHANGE RATES:

AUD/USD – 0.7071

AUD/GBP – 0.5410

AUD/EUR – 0.6309

AUD/NZD – 1.0441

AUD/JPY – 78.819

OTHER MARKETS:

All Ords (XAO) – 6,300

Gold – A$1,810/oz

Silver –  A$21.25/oz

WTI – US$61.81/barrel

DATA RELEASES TODAY:

AUD – Building Approvals m/m at 11.30am

AUD - RBA Rate Statement and Cash Rate at 2.30pm

AUD - Annual Budget Release at 7.30pm

USD - Core Durable Goods Orders m/m at 11.30pm

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Topics: Report, Market

Market Update - 1st April 2019 - AUD Holding Around Low 0.70's, Chinese Data Improving

Posted by Patrick Downes on April 1, 2019 at 8:30 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.

Chinese Data Improving:

Chinese manufacturing data released over the weekend has shown improvement, supporting the global outlook, which had started to sour last week with falls across most of the major equities markets. As one Chinese economist suggests, it's essentially showing a 'stabilisation in the global economy'. In my opinion one data set can't really do that, you need a series of data, and more will be out today in the Caixin Manufacturing PMI number at 12.45pm. AUD/USD nonetheless continues to be supported around current levels by higher commodities prices and marginally improved Chinese economic data.

Nab Business Confidence:

NAB Business Confidence and HIA New Home Sales figures are due for release this morning, no estimates are provided, however expect New Home Sales to continue to decline while business confidence might be boosted with an election around the corner.

Commodities: 

Commodities prices remain relatively well bid, with Zinc and Iron Ore not too far off 12 month highs amid tight supply and low global stockpiles. The low AUD will continue to support miners bottom lines and should provide for some bumper profit figures when companies report around the middle of the year.

AUD EXCHANGE RATES:

AUD/USD – 0.7085

AUD/GBP – 0.5423

AUD/EUR – 0.6306

AUD/NZD – 1.0402

AUD/JPY – 78.701

OTHER MARKETS:

All Ords (XAO) – 6,261

Gold – A$1,817/oz

Silver –  A$21.27/oz

WTI – US$60.21/barrel

DATA RELEASES TODAY:

AUD - NAB Business Confidence & HIA New Home Sales m/m at 11.30am

CNY - Caixin Manufacturing PMI at 12.45pm

USD - Retail Sales m/m at 11.30pm

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Topics: Report, Market

Market Update - 27th March 2019 - AUD Gains As Risk Aversion Abates, Brexit 2nd Referendum?

Posted by Patrick Downes on March 27, 2019 at 8:29 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 Gains:

The Aussie Dollar moved higher overnight with other risk assets as negative sentiment abated over the likelihood of an economic downturn in the near future. U.S and European stocks posted gains in unison, with the best performers being the S&P 500 in the U.S up 0.72%, while in Europe the French CAC led with a gain of 0.89%. The Aussie Dollar moved higher across the board with the biggest gains made against the Japanese Yen (up nearly 1%) and GBP (up 0.5%). AUD/USD is also back around the 0.7100 level but has really struggled much above here, again anything above 0.7100 on the wholesale market is a gift in my opinion to importers, and should be taken advantage of.

Brexit Second Referendum:

No economic data was released overnight, and again nothing much is due this evening or throughout today. Brexit shenanigans are continuing unabated, with the latest news that UK PM Theresa May cannot continue to negotiate on Brexit as a result of a vote in Parliament. Control is now seemingly back with the Opposition and minor parties with a new referendum or complete cancelling of Article 50 a strong chance following massive protests through England on the weekend.

My bet is a second referendum and a win for the remain camp. Should this occur, expect AUD/GBP to get annihilated, perhaps to the tune of about 100-200 points. I'll be watching closely.

AUD EXCHANGE RATES:

AUD/USD – 0.7103

AUD/GBP – 0.5370

AUD/EUR – 0.6301

AUD/NZD – 1.0294

AUD/JPY – 78.623

OTHER MARKETS:

All Ords (XAO) – 6,213

Gold – A$1,843/oz

Silver –  A$21.63/oz

WTI – US$60.05/barrel

DATA RELEASES TODAY:

EUR - ECB President Draghi Speaks at 7.00pm

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Topics: Report, Market

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