Market Update – 25th October 2018 – U.S Equities Wipe Out, AUD & Commodities Resilient

Despite a gargantuan selloff of U.S equities and to a lesser extent European equities overnight, the AUD and commodities prices have escaped most of the carnage unscathed. Fears about a waning U.S housing sector and weak profit growth in the tech sector saw the tech heavy Nasdaq fall the most erasing 4.43% to take it’s 1 month aggregate decline to just over 11% (note: U.S tech stocks were priced to perfection and exceptionally overvalued).  The S&P and Dow lost 3.09% and 2.41% respectively. The AUD actually finished higher vs the EURO and GBP but fell 20 points vs the Greenback to around 0.7030.

Commodities prices led by Oil, Zinc, Iron Ore and the safe haven of Gold moved higher. This suggests real resilience in commodities markets which should be a positive for the AUD in the medium to long run given the AUDs high correlation to commodities prices specifically Iron Ore.

Unfortunately a bad day for local equities is expected with futures markets suggesting falls in the vicinity of about 2%; so I suggest you refrain from logging into your Super or Comsec accounts today!

Further economic data out tonight with U.S core durable goods orders at 11.30pm, while the ECB (European Central Bank) decides on official interest rates a bit earlier in the evening.

AUD EXCHANGE RATES:

AUD/USD – 0.7030

AUD/GBP – 0.5449

AUD/EUR – 0.6165

AUD/NZD – 1.0791

AUD/JPY – 78.901

USD/BTC – $6,401

OTHER MARKETS: 

All Ords (XAO) – 5,926

Gold – A$1,746/oz

Silver –  A$20.78/oz

WTI – US$66.42/barrel

DATA RELEASES TODAY:

EUR – ECB Main Refinancing Rate at 10.45pm

USD – Core Durable Goods Orders at 11.30pm