Richard Perry
Independent Analyst
Falling commodity prices are still a concern for global markets. The issue was again brought to the fore yesterday amid a series of disappointing manufacturing PMIs from the world’s leading economies, as China and the US came in worse than expected. The impact is playing out across the oil markets which have now fallen back to multi month lows. Equity markets are feeling the strain, with markets most exposed to basic materials and oil sectors, have been hit the hardest (such as FTSE 100). The Reserve Bank of Australia has held rates steady at 2.0% today but interestingly it has also come out this morning and dropped its easing bias may reduce the pressure on the Aussie near term. The RBA has been trying to talk down the Aussie amid concerns over the commodities prices but this move is an interesting slight change of tack by the RBA.
Equity markets were under a little pressure yesterday with Wall Street closing lower by around a quarter of a percent on S&P 500, which has just held back Asian markets overnight too. The European session has also started off on the back foot today with a small slide. Forex majors have been interestingly settled in recent days and this has tended to continue today. The big move is with the Aussie which is over a percent higher in the wake of the slightly less dovish rhetoric from the RBA.
Traders will be keeping half an eye on the UK Construction PMI data at 0930BST (58.6 expected),prior to the US Factory Orders at 1500BST which are expected to improve by 1.8% for the month. New Zealand unemployment is due at 2345BST and is expected to increase slightly to 5.9%
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