Good Morning,
Market Headlines
Market sentiment was buoyed overnight with the FOMC keeping policy settings unchanged with a dovish narrative reiterating the prospect of lower rates for longer. Equity markets saw the S&P and the NASDAQ both gaining over 1% and the Dow 0.6% stronger. For Commodities, Brent crude futures gained 1.2% to $43.75, copper was relatively unchanged, iron ore bounced 3.0% to $110.45, and gold continued to rally, gaining 0.4% to $1982 – a fresh all-time high.
Currencies
AUD/USD: 0.7158 – 0.7197
AUD/EUR: 0.6082 - 0.6119
EUR/USD: 1.1719 – 1.1807
GBP/USD: 1.2928 – 1.3013
USD/JPY: 104.77 – 105.20
USD/CAD: 1.3334 – 1.3377
NZD/USD: 0.6642 – 0.6678
AUD/JPY: 75.20 – 75.52
AUD/NZD: 1.0763 – 1.0793
AUD Thoughts
- AUD/USD again battles 0.7200 following dovish Fed
- FED announcement came out as anticipated with Chairman Jerome Powell stressing fiscal support.
- Dismal prints of Aussie CPI failed to defy the Aussie bulls.
- Australia’s Export-Import Price Index and Building Permits will be the immediate catalysts.
Looking forward, Australia’s Import Price Index and Export Price Index for Q2 and June month’s Building Permits can offer immediate direction to the quote. However, major attention will be given to the qualitative catalysts and the US preliminary GDP for Q2.
Higher formation in a week favours the buyers targeting April 2019 top surrounding 0.7207 ahead of challenging the previous year top close to 0.7300. On the contrary, a four-day-old ascending trend line, at 0.7160 now, can offer immediate support ahead of 0.7065/60 area comprising July 24 low and June 10 high.
Event Risk Data Today
NZ – July Business Confidence, expected to show a slight improvement, in line with firming activity (prior: -29.8)
AU – Export and Import Price Index (prior: 2.7%, market f/c: -2.0%)
AU – June Building Approvals, forecasting a more modest decline (-4.0% and -2.8% respectively)
EU – June Unemployment is expected to rise again in June, from 7.4% to 7.7%.
US – Q2 GDP 35% annualised decline expected versus Q1’s 5% fall, core PCE and Personal Spending also to be watched