Market Update – 30th June 2020 – FY2020 To Close With An Equities Rebound & Powell

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.

AUD Holds Ground:

The AUD has spent the last four weeks consolidating following a rally that could only be called epic, between late March and the end of May. In the space of effectively two months AUD/USD added 13 cents, with a similar story panning out for AUD/EUR and AUD/GBP.

The bounce in the local currency has obviously dented profits for exporters, while importers have benefited greatly from the higher Aussie Dollar. While I can’t categorically say we are out of the woods completely, it does appear that Australia has a much better handle on the virus than the rest of the world and particularly places like the U.S and South America which are now seeing infection numbers grow unchecked.

Equities Markets:

Stock markets have ridden the bust and boom from the initial pandemic hysteria to the post pandemic euphoria and things appear to have settled somewhat. Having said that for the local market, 6,000 on the ASX seems a tough hurdle to pass. For the better part of four weeks our market has tried and failed to launch and hold much above 6,000 which could be an indication another correction is on the cards. I’ve done particularly well during the volatility in the stock market but I remain quite aware of the risks of a further stock market meltdown and so should all investors.

Chinese Data & Powell: 

Some Chinese economic data is released today with manufacturing PMI due at 11.00am. China has been ratcheting up it’s manufacturing sector over the past few months following a full Covid19 shutdown and it seems like things are back to some normality which should be reflected in the data due today.

Fed Chair Powell testifies in front of Congress tonight with questions likely to revolve around further stimulus measures and monetary policy. We could see some market volatility around 2.30am.

AUD EXCHANGE RATES:

AUD/USD – 0.6841

AUD/GBP – 0.5542

AUD/EUR – 0.6079

AUD/NZD – 1.0662

AUD/JPY – 73.616

OTHER MARKETS:

All Ords (XAO) – 5,915

Gold – A$2,580/oz

Silver –  A$26.00/oz

Oil – US$39.73 barrel

DATA RELEASES TODAY:

CNY – Manufacturing PMI at 11.00am

USD – Fed Chair Powell Testifies at 2.30am