Market Updates 17 July 2017

AUDUSD continued to strengthen and traded as high as 1.3% on late Friday, topping above US $0.78 cent for the first time since May 2015. The push was triggered by a weaker than expected economic data and Feds hinted an unlikely third US interest rate hike later this year.

 

Investors will be looking at GDP result due out today from China & Unemployment numbers from US and from a local focus Unemployment numbers due out in Australia on Thursday.

 

DATA RELEASES THIS WEEK:

 

Monday:

CNY – GDP q/y & Industrial Production y/y

 

Tuesday:

AUD – Monetary Policy Meeting Minutes

NZD – CPI q/q

 

Wednesday:

GBP – BOE Gov Carney Speaks

USD – Building Permits

 

Thursday:

AUD – Employment Change & Unemployment Rate

JPY – Monetary Policy Statement, BOJ Outlook Report & BOJ Policy Report

GBP – Retail Sales m/m

EUR – ECB Press Confidence & Minimum Bid Rate

USD – Unemployment Claims

 

Friday:

CAD – CPI m/m & Core Retail Sales m/m

 

For further information please contact;

 

Andrew Law

General Manager

0411 625 998

Market Updates – 10/07/2017

The markets look to start with a positive view with strong gains on Friday after employment data in the US showed strong jobs growth on the back of non-farm payroll added 222k new jobs. Investors are looking for further directions in the local markets with Business Confidence and Consumer Confidence due out this week and globally at Chairwoman Yellen on Thursday evening local time.

 

AUDUSD is also trading a higher from last week’s low currently seating just above USD $0.75 cents, Gold is slightly down trading just above USD $1,213.15 per ounce while Iron Ore continues to strengthen trading above USD $62.80 a ton.

 

DATA RELEASE FOR THIS WEEK:

 

MONDAY:

CNY – CPY y/y

 

TUESDAY:

AUD – NAB Business Confidence

 

WEDNESDAY:

AUD – Westpac Consumer Confidence

GBP – Average Earnings Index 3m/y

 

THURSDAY:

CAD – BOC Monetary Policy Report, BOC Rate Statement & Overnight Rate

USD – Fed Chair Yellen Testifies, Crude Oil Inventories, PPI m/m, Unemployment Claims

 

FRIDAY:

USD – CPI m/m, Core CPI & Retail Sales

 

Andrew Law

General Manager

0411 625 998

Market Updates 3/7/2017

AUDUSD is trading higher taking advantage of the weaker USD, as investors looking at other central banks potentially increasing rates from Eurozone, UK, Canada and NZ. Speculators are also looking to profit from the surging Euro, Pound & CAD all up around 2% against USD. Focus will be on the PMI data due out in China today, follow by PMI in US and further massive night in trading on Friday when the US releases its Non-farm payroll and unemployment rate.

DATA RELEASES THIS WEEK:

Monday:

CNY – Caixin Manufacturing PMI
GBP – Manufacturing PMI & BOE Gov Carney Speaks

Tuesday:

USD – ISM Manufacturing PMI

AUD – Retail Sales m/m & RBA Rate Statement

GBP – Construction PMI

Wednesday:

EUR – Services PMI

Thursday:

USD – FOMC Meeting Minutes, ADP Non-Farm Employment Change, Unemployment Claims

AUD – Trade Balance

CAD – Trade Balance

Friday:

USD – ISM Non-Manufacturing PMI & Crude Oil Inventories, Non-Farm Employment Change, Unemployment Rate & Average Hourly Earnings m/m

GBP – Manufacturing Production m/m & BOE Gov Carney Speaks

 

Andrew Law

General Manager

0411 625 998

Market Updates 26/06/2017

Australia Stock Markets are shaping for a positive start following solid gains in US as crude oil steadies after a three-day slide last week.   AUDUSD also started strongly currently trading around US$0.7569.
DATA RELEASE THIS WEEK:
Monday:
USD – Core Durable Goods Orders m/m
Tuesday:
EUR – ECB President Draghi Speaks
GBP – BOE Financial Stability Report & BOE Gov Carney Speaks
Wednesday:
USD – CB Consumer Confidence & Fed Chair Yellen Speaks
CAD – BOC Gov Poloz Speaks
EUR – ECB President Drangi Speaks
JPY – BOJ Gov Kuroda Speaks
Thursday:
USD – Crude Oil Inventories, Unemployment Claims & Final GDP q/q
Friday:
CAD – GDP m/m
Andrew Law
General Manager
m: 0411 625 998

Market Updates 19/06/2017

AUD hit a 2 month high last week and it continuing to trade higher against USD on the back of positive local jobs data and a weaker than expected US inflation data and an interest rise in the US. Currently trading above US$0.76 cents with investors watching the unemployment figures due out on Thursday in US.
DATA RELEASES FOR THIS WEEK:
Monday:
AUD – RBA Gov Lowe Speaks
Tuesday:
AUD – Monetary Policy Meeting Minutes
CHF – SNB Chairman Jordan Speaks
GBP – BOE Gov Carney Speaks
Thursday:
USD – Crude Oil Inventories
NZD – RBNZ Rate Statement & Official Cash Rate
CAD – Core Retail Sales m/m
USD – Unemployment Claims
Friday:
CAD – CPI m/m
 
Andrew Law
General Manager
m: 0411 625 998

Market Updates 5/6/2017

USD dropped to its lowest since the US presidential election in November 2016 after the US employment report missed both analyst forecast in May.
USD fell against nine of its G-10 peers with AUD advanced 0.9% to US74.43 cents before coming back down to now trading around US74.26 cents.  AUD also rebounded more than 3%  against the spot price of iron ore. All focus will be on Thursday with the election in England and on the local front, investors will be looking at the Trade balance in both Australia & China.
DATA RELEASES FOR THIS WEEK:
Monday:
GBP – Services PMI
Tuesday:
USD – ISM Non-Manufacturing PMI
AUD – Cash Rate & RBA Rate Statement
Wednesday:
AUD – GDP q/q
Thursday:
AUD – Trade Balance
CNY – Trade Balance
GBP – Parliamentary Elections
EUR – Minimum Bid Rate & ECB Press Conference
USD – Unemployment Claims
Friday:
CAD – BOC Gov Poloz Speaks, Employment Change & Unemployment Rate
GBP – Manufacturing Production m/m
Andrew Law
General Manager
m: 0411 625 998

Market Updates 22/05/2017

Bitcoin reached $1,900 thanks to a rush of investment from Asia, but that did not stay a record for long. BTCUSD is now trading a historic level of above $2,070 per bitcoin giving its entire market cap of about $34 billion.
Local shares are expected to open higher to start this week rebounding from Friday’s losses triggered by renewed interest in oil, gold, iron ore and base mentals. Spot price of iron ore traded 1.8% to US$62.69 a tonne on Friday and Chinese steel futures rallied. Crude Oil also traded higher above US$50, its highest in a month.
Last week our jobless rate fell to 5.7% close to a 4 year low from 5.9% with employers added 106,000 jobs over the first 4 months of 2017. That pushed up AUDUSD from 72.26 cents to as high as 74.67 cents before retreating to current trading level of 74.43 cents.
DATA RELEASE THIS WEEK:
MONDAY:
EUR – Euro Group Meetings
TUESDAY:
GBP – Prime Minister May Speaks, Inflation Report Hearings
EUR – German Ifo Business Climate
THURSDAY:
CAD – BOC Rate Statement & Overnight Rate
USD – Crude Oil Inventories, FOMC Meeting Minutes, Unemployment Claims
NZD – Annual Budget Release
FRIDAY:
USD – Core Durable Good Orders m/m & Prelim GDP q/q
Andrew Law
General Manager
m: 0411 625 998

Market Updates – China uses currency to check rising market meltdown risks

China has an insurance policy against a full-scale market meltdown: the daily currency fixing.

With stocks and bonds in retreat amid anxiety over Beijing’s deleveraging campaign, officials have been guiding the yuan higher against the US dollar in a move that’s caught market watchers by surprise. After meeting expectations earlier in the year, the reference rate used by the People’s Bank of China to manage the yuan has come in stronger than the forecasts of four banks who regularly track the measure on 24 of the past 31 trading days.

The PBOC is using the stronger fixings to prevent panic sentiment from spreading to the currency market,” said Xia Le, chief economist at Banco Bilbao Vizcaya Argentaria in in Hong Kong, referring to the reference rate that’s updated each day. “In the short term, no one can fight against the PBOC when it intervenes through the fixings. Investors will likely become more willing to sell the dollar, pushing the yuan higher from current levels.”

China seems to be trying to find a balance between tackling financial risks while avoiding a wider selloff that undermines faith in the markets and Beijing’s regulatory powers.

Policy makers are railing against speculation and stepping up controls on the banking industry, but also boosting injections of cheap cash amid concern over tight liquidity. The yuan is playing a steadying role, too, with foreign investors citing the currency’s stability in the face of spiking bond yields and equity-market whiplash as one of the reasons they’re sanguine about the clampdown.

While China has largely stemmed outflows through tougher capital controls, the PBOC is engineering a stronger yuan to preempt a renewal of those pressures amid the stock- and bond-market gyrations say, Khoon Goh, head of Asia research forAustralia & New Zealand Banking Group in Singapore. The onshore yuan reached a three-week high on Wednesday.

The authorities likely want to ensure that there is no pickup in outflows and keeping the yuan stable is one way to ensure this,” said Goh, one of the analysts whose forecasts have been trailing the yuan’s reference rates this month.

Predictability fades

Central bank policy stipulates that the yuan is restricted to moves of no more than 2 percent either side of the reference rate. But officials have never divulged exactly how the daily rate is calculated, with banks having to come up with their own models based on what the fixing has done in the past and bits of intelligence from policy makers. Since mid-2016, the reference rate has been very predictable — until now.

The rate has come in stronger than the median of fixing forecasts provided by the four banks — ANZ, Mizuho Bank, Scotiabank and China Guangfa Bank — every trading day since April 5, according to Bloomberg calculations. The fixing was 0.2 percent higher than the median projection on Tuesday, the biggest deviation since February.

The stronger fixing policy will help lure foreign investors to China’s onshore bond market, said Ken Cheung, a Hong Kong-based currency strategist at Mizuho. Offshore funds are set to get increased access to the mainland debt market via a trading link with Hong Kong.

The fact the yuan is seeing stability against the US dollar but remains weak versus other currencies, suggests the stronger fixing run is a sentiment-boosting move. The PBOC didn’t respond to questions faxed to their press office on Thursday.

Downside risks

Traders have been paring bets on yuan weakness, with odds of a drop beyond 7 per dollar by the end of June at 8 percent, down from 38 percent two months ago, according to options data compiled by Bloomberg. But strategists still see the currency, which traded at 6.8929 per dollar on Thursday, retreating to 7.05 per dollar by year-end.

While ANZ’s Goh says the “stronger bias” will likely persist, it will become difficult for the PBOC to maintain as the market starts to price in further interest-rate hikes from the Federal Reserve.

“This is not a fundamental revamp of China’s foreign-exchange policy — the PBOC will want to keep its policy consistent, which is the cornerstone of yuan stability,” said Mizuho’s Cheung. “But as China eases capital curbs to push for internationalization in the second half, the currency will face mild pressures to weaken.”

Andrew Law
General Manager
m: 0411 625 998

MARKET UPDATES 15/05/2017

AUD is trading higher against its USD despite a surge against other major currencies. USD has climbed to a 8 week high against the CNY last week. AUD has soared against NZD and the GBP also hit a 3 week high against EUR & USD. Investors will be looking at the Unemployment rate in Australia & US on Thursday for further directions.
DATA RELEASES THIS WEEK:
MONDAY:
CNY – Industrial Production y/y
TUESDAY:
GBP – Prime Minister May speaks
AUD – Monetary Policy Meeting Minutes
GBP – CPI y/y
USD – Building Permits
WEDNESDAY:
NZD – GDT Price Index & PPI Input q/q
GBP – Average Earnings Index 3m/y
CAD – Manufacturing Sales m/m
USD – Crude Oil Inventories
THURSDAY:
AUD – Employment Change & Unemployment Rate
GBP – Retail Sales m/m
USD – Unemployment Claims
FRIDAY:
EUR – ECB President Draghi Speaks
CAD – CPI m/m & Core Retail Sales m/m
Andrew Law
General Manager
m: 0411 625 998

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