Market Update – 19th May 2016 – U.S Fed Minutes Suggest June Rate Hike On The Table

  

One of the worlds largest asset managers has predicted that AUD/USD could be headed for the 60’s sooner rather than later. The reason? Continued slowing Chinese growth and the RBA willing to cut rates further to support the local economy while the U.S Fed look to raise rates to control inflation pressures. And, they may well be on to something, particularly if you consider that the U.S Federal Reserve could well raise rates once again as soon as June.

The latest monetary policy minutes released last night from the U.S Federal Reserve suggests the Hawks are starting to out number the Doves and so if positive economic data continues to get released between now and the next Fed meeting in June a rate hike could and would certainly be on the table.

Overnight U.S and European equities were either flat or up, while iron ore rallied for a third day – this time up by about half a percent to US$55.90 a tonne. Macquarie Bank estimates suggest a price of US$50 a tonne for the better part of 2016 and then higher in 2017.

AUD Employment and the unemployment rate are next up today so it’s going to be another period of volatile trade come 11.30am this morning.

DATA RELEASES TODAY:

AUD – Employment Change & Unemployment Rate at 11.30am

GBP – Retail Sales at 6.30pm

USD – Philly Fed Index at 10.30pm

G7 Mettings kick off tomorrow

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