7th July 2020 - Bulls keep 0.7000 on radars ahead of RBA interest rate decision



Good Morning,


Market Headlines

Equity markets returned after the July 4 long weekend adding to a positive sentiment with expectations that economies are on the road back to recovery in light of continued corona hotspots. The S&P500 is up 1.6%, the NASDAQ 100 up 2.5% to a record high. For commodities, Brent oil futures gained 0.7% to $43.10, copper gained 1.2%, iron ore was up 1.0% to $100.40, and gold gained 0.6%.


Currencies

US Dollar Index finished 0.4% lower on the day.

EUR ranged between 1.1280 to 1.1345.

USD/JPY ranged between 107.60 to 107.26.

AUD rallied from 0.6960 to 0.6988 reaching a one-month high.

NZD traded between 0.6550 to 0.6566.

AUD/NZD ranged between 1.0630 to 1.0663.


AUD Thoughts

AUD/USD probes the upper-end of 0.6968-88 trading range after six days of consecutive rise.

RBA is widely anticipated to hold the current monetary policy unchanged, rate statement could offer immediate direction.

Qualitative catalysts will be the key amid a light calendar past-RBA.


Today’s RBA’s meetings with be the markets focus even though they are expected to remain on hold and not expected to alter the current interest rate neither bond buying.


It should be noted that there are no major data/events from the US, except for JOLTS Job Opening for May, expected 4.85M versus 5.046M, which in turn could keep the virus and Chine related news in the driver’s seat.


The AUD/USD ability to cross the mid-June top surrounding 0.6975 enables it to pierce 0.7000 threshold. Though, the multi-month high of 0.7065, flashed on June 10, could challenge the quote’s further upside. Meanwhile, 21-day SMA near 0.6905, followed by 0.6900 round-figures, will offer immediate support ahead of a three-week-old support line near 0.6850.


Event Risk Data Today

Australia: Market is expecting the RBA to remain on hold. AiG Services PMI for June is out with expectations of a moderate number.


New Zealand: The QSBO general business situation index is expected to improve from -67.3, but will remain at low levels.


Singapore: June GDP


Canada: June Ivey PMI is expected to show a further pick up from April’s lows (prior: 39.1).


US: JOLTS job openings. FOMC members Daly and Barkin will also speak (04:00 AEST).


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