Market Update – 22nd February 2018 – Markets Get A Little Jittery Again As U.S Fed Minutes Show ‘Economic Momentum’

Stocks and the Aussie Dollar more or less fell in unison overnight as the latest U.S Federal Reserve minutes showed “substantial underlying economic momentum” in the U.S which at the moment to traders means higher interest rates. The prospect of higher interest rates have more recently sent jitters through markets – which is exactly what we saw this morning with U.S equities selling off. The U.S Federal Reserve in December also boosted their 2018 economic forecasts to 2.5% growth while outsiders and analysts think the number could be as high as 2.8%. Regardless of the semantics and the exact number it would appear that rates are going higher in 2018 and the reason markets are jittery is because the Fed has a knack of raising interest until something breaks as they did in 2008 and on a number of occasions previously. Markets never enter bear markets on low growth, they enter bear markets when economic growth peaks – how far off that is is anyone’s guess.

The Aussie dollar presents some compelling levels to buy at today particularly for the exporters among us as we’ve seen a drop in the range of about 100 points vs. the Greenback since my last report on Tuesday.

AUD EXCHANGE RATES:

AUD/USD – 0.7806

AUD/GBP – 0.5604

AUD/EUR – 0.6349

AUD/NZD – 1.0659

AUD/JPY – 84.010

USD/BTC – $10,276

COMMODITIES: 

Gold – A$1696/oz

Silver –  A$21.12/oz

WTI – US$61.09/barrel

DATA RELEASES TODAY:

GBP – Second Estimate GDP at 8.30pm

EUR – ECB Monetary Policy Minutes at 11.30pm