
Good Morning,
Market Headlines
US equity markets reached fresh record highs, led by tech stocks. The S&P500 is up 0.5%, the NASDAQ +1.3%. The US dollar rose, partly due to solid US manufacturing data contrasting with disappointing Eurozone inflation data, while bond yields fell. US 2yr treasury yields ranged sideways between 0.13% and 0.14%, while the 10yr yield fell from 0.73% to 0.67%. Commodities, brent crude oil futures rose 0.8% to $45.65, copper fell 1.4%, iron ore rose 1.0% to $125.65, and gold rose 0.1%.
Currencies
AUD/USD: 0.7360 – 0.7410 (the highest level since August 2018)
EUR/USD: 1.1901 – 1.2014
GBP/USD: 1.3370 – 1.3481
USD/JPY: 105.60 – 106.15
USD/CAD: 1.2994 – 1.3086
NZD/USD: 0.6737 – 0.6779
AUD/JPY: 77.97 – 78.28
AUD/NZD: 1.0890 – 1.0946
AUD Thoughts
- AUD/USD consolidates from a 25-month high before attempting a bounce off 0.7360.
- US dollar pullback, on the back of strong ISM Manufacturing PMI, plays a major role.
- Equities, gold also remain on the front foot.
- Aussie GDP can print the record GDP contraction, trade war with China and virus updates are also the key.
Looking ahead, markets may keep eyes on the qualitative risk catalysts ahead of the Aussie Q2 GDP. With the forecasts suggest a 6.0% QoQ drop in the GDP versus -0.3% prior, any positive surprise may help the quote to regain 0.7400.
AUD taking a U-turn from a six-month-old ascending trend line, at 0.7420 now, which in turn suggests further weakness towards January 2019 top surrounding 0.7300. Meanwhile, the July 2018 peak near 0.7485 can please the bulls past-0.7420.
Event Risk Data Today
AU – Q2 GDP
US – ADP employment
US – July factory orders and durable goods