Good Morning,
Market Headlines
Equity markets took a step back as we come into the into the Fed's showdown this evening, Dow ended down 205 points, or 0.8%, S&P 500 fell 0.7% and the Nasdaq dropped 1.3%. Commodities, Brent crude futures 0.6% lower to $43.15, copper gained 0.6%, and iron ore rose 0.2% to $107.25. Gold rallied 0.8% to $1981 – an all-time high.
Currencies
AUD/USD: 0.7114 – 0.7167
AUD/EUR: 0.6071 – 0.6111
EUR/USD: 1.1699 – 1.1743
GBP/USD: 1.2839 – 1.2952
USD/JPY: 104.96 – 105.66
USD/CAD: 1.3346 – 1.3407
NZD/USD: 0.6634 – 0.6669
AUD/JPY: 74.97 – 75.31
AUD/NZD: 1.0723 – 1.0759
AUD Thoughts
- AUD/USD waves around mid-0.7100 area with eyes on Aussie CPI
- Risk-tone sours amid virus woes, uncertainty surrounding US fiscal package
- Fed announced extension of lending facilities from September to December
- Aussie Q2 CPI, risk catalysts can entertain markets ahead of the Fed decision
Looking ahead, Australia’s Q2 CPI is expected to slump from +0.3% to -2.0% whereas the RBA Trimmed Mean CPI may recede from 0.5% to 0.1% quarterly. FED’s meeting this evening is unlikely to see a major change in policy, but may include outcome based forward guidance focused on sustainably achieving the 2% inflation target and yield curve control.
AUD/USD - unless declining below 0.7065/60 support-zone, comprising Friday’s bottom and June month’s top, buyers are less likely to forget targeting 0.7200 threshold. Though, the pair’s further upside depends upon how well it can cross 0.7210 before targeting February 2019 top surrounding 0.7300.
Event Risk Data Today
AU – Q2 CPI
US – FOMC rate decision