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.
All Calm…Before The Storm?
Global markets have entered a welcome period of relative calm this week with very little volatility across asset classes. In fact, the Aussie Dollar has traded in a 50 point range since last Thursday vs the Greenback, while AUD/GBP presents a similar scenario having traded in a tight range of around 80 points since August 8th. The Gold price has also been relatively flat since the start of August after a stellar run in which it’s added nearly 30% since the start of 2019 in AUD terms.
U.S and European equities finished last week well and started this week quite well, however last night saw a bit of profit taking and an eventual sell off. The sell off though was not extreme with markets across U.S and Europe only down around half a percent with the outlier being the London FTSE which lost around 0.9% as Brexit concerns continue to gnaw at investor confidence. Our local market right now looks set to open around half a percent lower (ASX200).
All Eyes On Fed At 4am:
With no significant data out today locally all eyes turn to U.S FOMC Meeting Minutes released at 4.00am tomorrow morning. Equities, commodities and risk assets more broadly got slammed following the last FOMC meeting three weeks ago and Jerome Powell copped much of the blame with a rudderless critique of the Feds current strategy. Trump has been in his ear about supporting the economy with cuts and QE and so it will be certainly interesting to see the full detailed FOMC minutes from their last meeting. As I mentioned all eyes are on the Fed at the moment and so we could see a bit of volatility tonight depending on the market reads the minutes. Clients wishing to take a punt on a higher AUD should wait til tomorrow, those wishing to take risk off the table will book FX deals before COB today.
AUD EXCHANGE RATES:
AUD/USD – 0.6746
AUD/GBP – 0.5536
AUD/EUR – 0.6072
AUD/NZD – 1.0534
AUD/JPY – 71.722
All Ords (XAO) – 6,627
Gold – A$2,224/oz
Silver – A$25.33/oz
WTI – US$56.07/barrel
DATA RELEASES TODAY:
USD – FOMC Meeting Minutes at 4.00am (tomorrow morning)
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