Aussie dollar still pressure as iron ore tanks again, but US dollar may be turning

Quick Recap

US stocks reacted to the weaker than expected data overnight while forex traders pushed the Aussie dollar lower once more as iron is really tanking now.

As I wrote at Business Insider this morning, “the data in the rest of the economy has been missing expectations for three months now and we saw that repeated overnight with the release of the ADP employment data (+189,000 versus +225,000) and the ISM manufacturing survey (51.5 versus 52.5 expected).”

That’s why I still like USDJPY lower, It’s why I’m cautiously bullish Euro but it’s why I really like gold as I discussed yesterday morning.

I’m going to quote myself again, mainly because I can’t think of a better way to say it but, “stocks in the US noticed the weaker economic data in the run up to non-farm payrolls Friday and the upcoming earnings season and had a small swoon. Of course, the falls during the day were nothing like the dips we saw in Asian trade on S&P and Dow futures yesterday. But Sam Ro wrote overnight that those moves are a little bit worrying in what some analysts believe they portend — a big correction!”

No need to get bearish yet but Q1 was a bit volatile across many markets as I discussed yesterday afternoon and the big shock for Q2 could be weak US growth. That will have huge implications across traded markets. It will alos provide plenty of trading opportunities.

Elsewhere forex moves weren’t that great in the end but the US dollar lost the strength it had displayed earlier in the day as US traders entered the fray. Oil spiked more than 4% higher and US 10 year bonds dipped another 6 points to 1.86%.

Today should be quiet but it could also be volatile as traders at the big banks want to go home sqaure before the 4 day break. these means any positions clients land them with will be cleared pretty swiftly and aggressively.

On the day

On the data front today TD inflation is out in Australia along with the trade data from February. Tonight is fairly quiet globally but US Challenger jobs data and weekly jobless claims will be more important than normal given that non-farms is out tomorrow when most traders are absent from their desks.

And here’s the overnight Scoreboard (8.36 am AEDT):

• Dow Jones down 0.44% to 17,698
• Nasdaq down 0.42% to 4,880
• S&P down 0.4% to 2,059
• London (FTSE 100) up 0.54% to 6,809
• Frankfurt (DAX) up 0.29% to 12,001
• Paris (CAC) up 0.57% to 5,062
• Tokyo (Nikkei) down 0.9% to 19,034
• Shanghai (composite)up 1.66% to 3,810 WOW! to 3,749
• Hong Kong (Hang Seng) up 0.73% to 25,082
• ASX Futures (SPI June) up 23 points to 5,870
• AUDUSD: 0.7599
• EURUSD: 1.0765
• USDJPY: 119.67
• GBPUSD: 1.4824
• USDCAD: 1.2618
• Crude: $49.55
• Gold: $1,204

CHART OF THE DAY:

AUDJPY Weekly: This is a heads up for a potential big move. 

Big levels to watch in coming weeks. 90.49 and then 89.43. A bit of a way away but keep them in the memory banks as levels to trade of or go with the break of.

 GOLD: As discussed yesterday had an upside bias and the $20 move overnight is consistent with a move back toward the recent high around $1,219/20 and then if that gives way $1,240ish.

I’ll be back on Tuesday morning. Happy Easter!