Jim Devonport
Compass Global Markets
The market in brief:
• AUD up USD 1 cent on the day
• NZD pulled slightly higher
• Australian Trade Deficit widens
• RBA cut interest rates
• RBA gave no suggestion of further cuts
• Spanish Unemployment increase
• UK Construction falls
• US Trade Deficit widens
• NZ Dairy Price falls again
• Gold at $1193 & Brent Crude at $67.53
Market moving events for the next 24 hours:
• Japanese Bank Holiday (Constitution Day)
• NZ Unemployment
• Australian Retail Sales
• UK Services
• US ADP Non-Farm Employment Change
• Fed Chairwoman Yellen speaks
AUDUSD: The Australian Dollar opens higher on the day, despite the much expected interest rate cut from the RBA. The central bank once again pushed interest rates to all-time lows, blaming the move on commodity prices although also delivering a rather upbeat statement and suggesting this was the last cut for some time. News out of the US saw their trade deficit widen and this resulted in another push higher for the local currency. The important economic data continues with domestic Retail Sales, jobs data from the US followed by a speech by the Fed Chairwoman. However focus remains on the US Non-Farm Payrolls on Friday, so we cannot see any move getting too exaggerated. On the charts support sits 100 points below, but we see further upside and an attempt at last week’s highs as a minimum.
AUDEUR: Although the Euro has strengthened elsewhere, the RBA’s neutral statement has given the bulls all they needed and the pair has been driven to week long highs. The Euro is however holding its own, despite another tick higher in Spanish Unemployment, as the EU Commission suggested the outlook is good due to lower oil prices, global growth and a weaker currency. There is only second tier data to come from Europe for the rest of the week, so we’ll look onshore for direction. Technically we trade either side of the 50% retracement of the month long range, but do ultimately favour a slow test higher.
AUDGBP: The Australian Dollar had a very brief blip lower, upon news that the RBA had cut, however the pair opens at 3 week highs. A downturn in UK Construction helped with the push as did more political uncertainty as we head towards the election. Meanwhile we have Services data this evening, which is not expected to show much sign of any improvement and so should keep the pressure on the Pound. Technically the big news is we appear to have broken the long term pennant formation and expect the upward move to continue; especially should the election go as expected, for at least another 1% this week.
AUDNZD: The Tasman cross opens exactly NZD 1 cent higher today. As forecast in yesterday’s report we had a small blip post the RBA announcement, but have the in continued in the uptrend as the interest rate cycles from each country start to reverse. Another fall in NZ dairy prices compounded the move, although AUD buyers with NZD’s may get a chance later this morning when the expected pick up in employment may give the Kiwi a boost. Medium term we head higher and target the 50% retracement of the 6 month long sell off that sits 250 points above. Support sits at the 2 week long trend line that held yesterday.
test
• AUD up USD 1 cent on the day
• NZD pulled slightly higher
• Australian Trade Deficit widens
• RBA cut interest rates
• RBA gave no suggestion of further cuts
• Spanish Unemployment increase
• UK Construction falls
• US Trade Deficit widens
• NZ Dairy Price falls again
• Gold at $1193 & Brent Crude at $67.53
Market moving events for the next 24 hours:
• Japanese Bank Holiday (Constitution Day)
• NZ Unemployment
• Australian Retail Sales
• UK Services
• US ADP Non-Farm Employment Change
• Fed Chairwoman Yellen speaks
AUDUSD: The Australian Dollar opens higher on the day, despite the much expected interest rate cut from the RBA. The central bank once again pushed interest rates to all-time lows, blaming the move on commodity prices although also delivering a rather upbeat statement and suggesting this was the last cut for some time. News out of the US saw their trade deficit widen and this resulted in another push higher for the local currency. The important economic data continues with domestic Retail Sales, jobs data from the US followed by a speech by the Fed Chairwoman. However focus remains on the US Non-Farm Payrolls on Friday, so we cannot see any move getting too exaggerated. On the charts support sits 100 points below, but we see further upside and an attempt at last week’s highs as a minimum.
AUDEUR: Although the Euro has strengthened elsewhere, the RBA’s neutral statement has given the bulls all they needed and the pair has been driven to week long highs. The Euro is however holding its own, despite another tick higher in Spanish Unemployment, as the EU Commission suggested the outlook is good due to lower oil prices, global growth and a weaker currency. There is only second tier data to come from Europe for the rest of the week, so we’ll look onshore for direction. Technically we trade either side of the 50% retracement of the month long range, but do ultimately favour a slow test higher.
AUDGBP: The Australian Dollar had a very brief blip lower, upon news that the RBA had cut, however the pair opens at 3 week highs. A downturn in UK Construction helped with the push as did more political uncertainty as we head towards the election. Meanwhile we have Services data this evening, which is not expected to show much sign of any improvement and so should keep the pressure on the Pound. Technically the big news is we appear to have broken the long term pennant formation and expect the upward move to continue; especially should the election go as expected, for at least another 1% this week.
AUDNZD: The Tasman cross opens exactly NZD 1 cent higher today. As forecast in yesterday’s report we had a small blip post the RBA announcement, but have the in continued in the uptrend as the interest rate cycles from each country start to reverse. Another fall in NZ dairy prices compounded the move, although AUD buyers with NZD’s may get a chance later this morning when the expected pick up in employment may give the Kiwi a boost. Medium term we head higher and target the 50% retracement of the 6 month long sell off that sits 250 points above. Support sits at the 2 week long trend line that held yesterday.
test
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