Yesterday was a day to forget with the ASX All Ords down a whopping 2.8% at the close. Today looks more positive, with local equities tipped to open marginally higher following a big bounce in U.S and European equities overnight. The NASDAQ gained nearly 3%, while the while the S&P and Dow finished up 1.8% and 1.6% respectively.
The AUD also made gains across the board, with AUD/USD up around 20 points, while AUD/EUR and AUD/GBP finished higher by about half a percent. Gold retreated as risk AVERSION turned into risk ON, but I suspect Gold’s time in the sun is not yet over and we will continue to see more bullish momentum for the yellow metal as concerns about global growth and trade continue to simmer.
Iron ore prices hit fresh 7 month highs this morning and according to Business Insider have entered a bull market climbing 20% since July to be trading near US$76.10 a tonne. The strength in iron ore prices would normally be a bullish indicator for the AUD, but with so much risk aversion over the past month the AUD is finding it hard to make and hold consistent gains particularly vs. the Greenback.
Overnight the ECB held rates at 0.00% but indicated growth and inflation are rising and that interest rates in the Euro area will rise sometime in the middle of next year.
Economic data out tonight includes U.S Advance GDP at 11.30pm.
AUD EXCHANGE RATES:
AUD/USD – 0.7047
AUD/GBP – 0.5489
AUD/EUR – 0.6191
AUD/NZD – 1.0820
AUD/JPY – 79.225
USD/BTC – $6,373
All Ords (XAO) – 5,759
Gold – A$1,740/oz
Silver – A$20.66/oz
WTI – US$67.01/barrel
DATA RELEASES TODAY:
USD – Advance GDP q/q at 11.30pm
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