Market Update – 4th June 2019 – AUD & Stocks Waiting On RBA Cash Rate Decision

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.

Stocks Inch Higher:

European and U.S equities mostly advanced overnight, however the NASDAQ didn’t get the bullish memo retreating by a little over 1.6%. Local equities had a poor start to the week yesterday falling around 1.25%. Today looks a bit better with futures markets suggesting the ASX will open around 0.2% higher. The AUD has made some gains since Friday, particularly vs the USD and GBP, however those gains will be tested today.

AUD At Risk:

Retail sales are released this morning at 11.30am and are tipped to remain relatively sluggish at around 0.2% growth month on month. We’ve seen this sort of weak retail sales numbers for the better part of 5 or 6 years. The RBA cash rate decision and RBA statement follows this afternoon and the market is expecting to see a 25 basis point cut at 2.30pm. The result of a cut will likely see the AUD fall vs the majors while equities should rally into the afternoon as lower interest rates are generally seen as good for business and stocks in general.

Another scenario is that the RBA holds off cutting interest rates today, and I’m in a minority thinking this. However the result of no cut would probably see a bounce in the AUD given the market has priced in a cut.

AUD EXCHANGE RATES:

AUD/USD – 0.6945

AUD/GBP – 0.5476

AUD/EUR – 0.6172

AUD/NZD – 1.0539

AUD/JPY – 75.059

OTHER MARKETS:

All Ords (XAO) – 6,410

Gold – A$1,898/oz

Silver –  A$21.22/oz

WTI – US$56.56/barrel

DATA RELEASES TODAY:

AUD – Retail Sales m/m at 11.30am

AUD – Cash Rate & RBA Rate Statement at 2.30pm

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Patrick Downes

Senior Corporate FX Dealer

Phone Patrick – 0431 278 632 

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