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
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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