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.
Stock Market Volatility Returns:
Volatility appears to be back with both local and international equities surging forward by as much as 5% during Thursday trade only to have almost all those gains given back during their respective Friday sessions. Further falls are likely today with local ASX futures opening down 2.13% (as I write) while U.S Dow and S&P 500 futures are down 1.5% at this moment. Warren Buffett’s sale of all his U.S airline positions sends an ominous warning that perhaps the worst is still yet to come and it’s probably why futures are off so much this morning. Throw into that the potential for a new trade war between the U.S and China and it’s not hard to see why this week could be shocker. U.S Secretary of State Mike Pompeo also claimed in a Sunday interview that there is “enormous evidence” the Covid19 virus originated in a Chinese lab, without providing any evidence. This is sure to infuriate China and may result in some form of retaliation.
AUD Comes Off Highs:
The AUD has performed exceptionally well recently, hitting two and three month high’s vs. the Greenback and Euro & GBP. However the recent equities sell off has seen some profit taking and a lower AUD over the past couple of sessions. All in all though it would appear cyclical lows are in for the AUD and some consolidation around current levels are likely. Consolidation could mean AUD/USD travels back towards 0.6000 or as high as 0.7000 in the short to medium term.
As such Importers should look to take advantage of AUD rallies and purchase currency as needed. Exporters: it would appear the tide has turned and any dip should be seen as an opportunity to take cover or convert currency back to AUD.
AUD EXCHANGE RATES:
AUD/USD – 0.6361
AUD/GBP – 0.5095
AUD/EUR – 0.5802
AUD/NZD – 1.0557
AUD/JPY – 68.032
All Ords (XAO) – 5,325
Gold – A$2,656/oz
Silver – A$23.32/oz
Oil – US$20.09 barrel
DATA RELEASES TODAY:
EUR – EU Economic Forecasts
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