Market Update – 14th February 2019 – AUD Falls Despite Solid Gains For U.S Equities

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 Falls, Equities Gain:

The AUD fell overnight despite a bullish finish for global equities and good momentum as Trump declared talks with China are going ‘very well’ as the March 1 deadline of higher U.S tariffs on Chinese imports approaches. U.S stocks were led higher by the Dow, which finished up 0.46%, while the S&P finished up 0.3%; in Europe the best performer was the UK FTSE up just over 0.8%. The AUD’s overnight declines takes it’s falls since Tuesday morning to around half a percent evenly spread across the board.

Commodities Off The Boil: 

Commodities prices have continued to come off the boil in the past week with Zinc and Lead lower, while Iron Ore has held above 600CNY per tonne on the Chinese Dalian Futures market. Iron ore may have another significant move higher as Vale exports remain constrained following their tailings dam disaster. Higher iron ore and commodities prices more broadly should boost the bottom line for our miners which should in turn support GDP growth and even the AUD. I continue to watch the interrelationship between the AUD and Iron ore prices pretty closely.

Data Coming Up:

Not a great deal of economic data out today with only local MI Inflation numbers due at 11.00am. The data asks respondents to predict how much they think the price of goods and services will change during the next 12 months. A higher number shows consumers are confident and can manifest into higher real inflation, while a lower number could suggest respondents don’t feel rosy about the economy at all and inflation is set to head lower. The number has been declining for the past year and a half.

AUD EXCHANGE RATES:

AUD/USD – 0.7056

AUD/GBP – 0.5484

AUD/EUR – 0.6260

AUD/NZD – 1.0400

AUD/JPY – 78.379

OTHER MARKETS:

All Ords (XAO) – 6,140

Gold – A$1,842/oz

Silver –  A$21.95/oz

WTI – US$54.29/barrel

DATA RELEASES TODAY:

AUD – MI Inflation Expectations at 11.00am

USD – Core Retail Sales m/m & Producer Price Index at 12.30am

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Patrick Downes

Senior Corporate FX Dealer

Phone Patrick – 0431 278 632 

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