ScoMo delivered a pretty dull budget overnight, promising only to reduce taxes today for middle income earners while massively reducing taxes for the very wealthy in about 6-7 years time. The trade off for middle income earners is 500AUD today at the expense of tax revenue which could be invested in hospitals, education and other essential services. A bit rich for a Government who when in opposition only spoke about reducing the deficit, now they are throwing around tax cuts like confetti. The only highlights of the budget in my opinion were more funding for aged care and continued funding of further important infrastructure projects across Australia such as a proposed Airport train link to Tullamarine in Melbourne.
The AUD and market more broadly doesn’t appear to have liked the budget with the Aussie down around half a percent over night. Also dragging on the Aussie dollar is the fact that Donald Trump has decided to pull out of the Iran Nuclear Deal which had been painstakingly put together by the Obama administration and could now fuel further tensions in the middle east.
Ahead today is US PPI at 10.30pm.
AUD EXCHANGE RATES:
AUD/USD – 0.7445
AUD/GBP – 0.5491
AUD/EUR – 0.6272
AUD/NZD – 1.0685
AUD/JPY – 81.177
USD/BTC – $9,262
OTHER MARKETS:
All Ords (XAO) – 6,196
Gold – A$1767/oz
Silver – A$22.15/oz
WTI – US$70.12/barrel
DATA RELEASES TODAY:
USD – PPI at 10.30pm
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Patrick Downes
Senior Corporate FX Dealer
Phone Patrick – 0431 278 632
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