Good Morning,
Market Headlines
Market sentiment appeared to stabilise by little fresh political news after one of the most turbulent weeks of Trump’s presidency. It was not without some drama though, with the President declaring “I’m not gonna waste my time on a virtual debate”, pulling out of the second US Presidential televised event. Markets gained further ground as polls increasingly pointed to a Biden win, increasing optimism of fiscal stimulus beyond the election.
Prospects for near term US fiscal aid appeared to diminish as Pelosi countered Republican hopes of piecemeal support by stating that any specific support needs to be in association with a large-scale support package. In addition to Trump repeating support for piecemeal fiscal support he countered market confidence when he stated that he would use further Tariffs against China in a second term.
Commodities
Crude oil surged as Hurricane Delta paralysed US Gulf output. Nov WTI gained +3.23% to USD41.23/bbl, a one month high, and Dec Brent rose +3.36% to USD43.39/bbl). Gold was little changed at USD1885/oz and USD23.80/oz. Iron ore also gained +2.8%,
Equity Markets
FTSE +0.5% at 5978
Nikkei +1.0% at 23647
ASX 200 +1.1% at 6102,
Dow 0.4% at 28416
S&P +0.7% at 3443
NASDAQ +0.4% at 11412
Currency
AUD/USD: 0.7147 – 0.7170
EUR/USD: 1.1733 – 1.1782
GBP/USD: 1.2894 – 1.2970
USD/JPY: 105.93 – 106.04
USD/CAD: 1.3199 – 1.3251
NZD/USD: 0.6565 – 0.6597
AUD/JPY: 75.71 – 75.97
AUD/NZD: 1.0859 – 1.0894
AUD Thoughts
The AUD/USD continues to recover from levels under 0.7100 it reached earlier during the week. The recovery found resistance around 0.7170 that is the key resistance ahead. A break higher would expose 0.7210 (last and current week high). On the flip side, a consolidation below 0.7145 would signal more weakness ahead; the next support stands at 0.7120 that protects the weekly low at 0.7095
Event Risk Data Today
Australia: Housing finance approvals posted a strong rebound throughout June-July (prior: 8.9%, market f/c: 1.0%). Owner occupier finance (prior: 10.7%, mkt f/c: -1.0%) and Investor finance (prior: 3.5%, mkt f/c: -3.0%) are both expected to deteriorate.
The half-yearly RBA Financial Stability Review will be released at 11:30 AEST.
UK: August GDP
US: August Wholesale Inventories