Market Update – 13th August 2019 – Stocks & AUD Fall As Markets Remain Volatile

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 & AUD Fall

Stocks in the U.S and Europe declined overnight falling by as much as 1.5% and dragging commodity prices and the AUD lower with them. The local stock market actually finished 0.1% higher yesterday afternoon, but the poor showing across equities markets overnight means local stocks are tipped to open half a percent lower this morning.

The Aussie Dollar remains for the most part weak and is still near 10 year lows vs. many of the majors including the Greenback and Euro. AUD/GBP however is some 25% higher than where it was back in mid 2015 at the height of Brexit vote speculation. The eventual vote in mid 2016 was for Britain to exit the Euro area, but three years on and we are no closer to a resolution, with some speculation even suggesting another vote may be the only solution to the deadlock.

Local & Overseas Data: 

A bit of data out today and this evening; Nab Business Confidence numbers are due at 11.30am. A weak reading is expected again following particularly poor numbers for most of this year. An initial spike after the Liberal’s election win in June has quickly dissipated and it’s fair to say optimism is not what it used to be. Interest rates are heading lower and a potential royal commission into the building industry could drive further negative sentiment, which could flow into a lower AUD.

Employment numbers and earnings are out in the U.K this evening, while U.S CPI is due at 10.30pm.

AUD EXCHANGE RATES:

AUD/USD – 0.6723

AUD/GBP – 0.5557

AUD/EUR – 0.5989

AUD/NZD – 1.0435

AUD/JPY – 70.769

OTHER MARKETS:

All Ords (XAO) – 6,670

Gold – A$2,239/oz

Silver –  A$25.28/oz

WTI – US$54.62/barrel

DATA RELEASES TODAY:

AUD – NAB Business Confidence at 11.30am

GBP – Average Earnings Index & Unemployment Rate at 6.30pm

USD – CPI m/m at 10.30pm

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Patrick Downes

Senior Corporate FX Dealer

Phone Patrick – 0431 278 632 

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