Market Update – 15th August 2019 – Volatility Strikes Again As HK Protests & Investor Sentiment Worsen

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.

Volatility Back:

Volatility is back again (it never really went anywhere) and U.S & European equities are a bit worse for wear this morning. Stocks were down around 3% across U.S indices and between 1.5-2% on European bourses as investors switched out of risky assets and into safe havens such as Gold and U.S treasuries. The spike in volatility and sell off coincides with continued political/social unrest in HK and general nervousness about the economic impacts of this extended trade war between Trump and China. What’s going on globally really is a recipe for volatility and we shouldn’t be surprised to see market volatility slowly picking up.

Where’s The AUD? 

Well the Aussie Dollar is doing more of the same really, up and down and up and down. In fact since the start of August (only two weeks ago) AUD/USD has tested 0.6900 on the upside and 0.6670 on the downside – a range of about 230 points or over 3%. Do I expect complete capitulation? No, but importers should be completely clear that things are not all rosy right now and we may well continue to test lower lows through this year or until something changes from a macro economic perspective. Forward Contracts can be hard to get your head around when doing for the first time, but they really do solve a lot of problems for an importer and exporter for that matter. Importers booking forwards this year have been better off than those who have not.

Unemployment Numbers Due: 

A bit of data out today with unemployment numbers at 11.30am, expectations are for no change in the unemployment rate. Later tonight we’ll see U.K and U.S retail sales figures.

AUD EXCHANGE RATES:

AUD/USD – 0.6715

AUD/GBP – 0.5565

AUD/EUR – 0.6023

AUD/NZD – 1.0454

AUD/JPY – 71.035

OTHER MARKETS:

All Ords (XAO) – 6,677

Gold – A$2,247/oz

Silver –  A$25.51/oz

WTI – US$54.91/barrel

DATA RELEASES TODAY:

AUD – Employment Change and Unemployment Rate at 11.30am

GBP – Retail Sales m/m at 6.30pm

USD – Core Retail Sales m/m and Philly Fed Manufacturing Index at 10.30pm

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Patrick Downes

Senior Corporate FX Dealer

Phone Patrick – 0431 278 632 

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