Market Update – 5th September 2018 – Commodities & Equities Decline Along With AUD Despite Positive RBA

I feel like I’ve said it alot and that’s because I probably have….but the RBA decided to keep rates on hold once again at 1.5% which marks the 23rd meeting in a row in which the RBA have done absolutely nothing. So how did the Aussie Dollar react yesterday? Well AUD initially rallied as the accompanying rate statement appeared a little more bullish on the Australian economy as the RBA forecast “growth of the Australian economy to average a bit above 3 per cent in 2018 and 2019” while noting that “in the first half of 2018, the economy is estimated to have grown at an above-trend rate.” All generally good signs that growth and inflation are growing, however the once continuing concern was the rapidly deteriorating housing market. How this play’s out remains to be seen, but at this point it doesn’t look great for property in the short to medium term.

The late afternoon saw a resumption of risk-off as commodities markets, the AUD and stocks started to falter and post declines. European equities had a shocker overnight finishing down by as much as 1.3%, while commodities were led lower by bellwether Copper which lost 1.7% and extended losses to a fifth straight day. The AUD is down marginally from yesterday. Overall, markets remain very jittery as Trump continues with trade war rhetoric and a generally abrasive approach to traditional economic allies.

Local GDP data is out this morning at 11.30am with the market expecting to see 0.7% growth in GDP for the latest quarter.

AUD EXCHANGE RATES:

AUD/USD – 0.7149

AUD/GBP – 0.5553

AUD/EUR – 0.6167

AUD/NZD – 1.0920

AUD/JPY – 79.720

USD/BTC – $7,332

OTHER MARKETS: 

All Ords (XAO) – 6,398

Gold – A$1,660/oz

Silver –  A$19.73/oz

WTI – US$69.24/barrel

DATA RELEASES TODAY:

AUD – GDP at 11.30am

GBP – Services PMI at 6.30pm

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Patrick Downes

Senior Corporate FX Dealer

Phone Patrick – 0431 278 632 

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