Collinsonfx Daily Market Commentary

Daily Market Commentary
 
Global equity markets were lower overnight, after big rebounds the previous trading day, with Geo-Politics dominating the narrative. The Italian PM resigned, but the EUR held steady at 1.1095, as this had been telegraphed and the machinations will rumble through the process. Brexit developments dominated European markets, with the British PM Boris Johnson about to embark of a tour of Germany and France, in the lead in to the G7. Boris Johnson has sent a detailed letter ruling out the 'Irish backstop'. European President Tusk has rejected this, out of hand, but the German Chancellor was much more conciliatory, which allowed the GBP to rebound to 1.2165. PM Boris Johnson will embark on a huge week of negotiations, with key allies Merkel and Macron and he seems to have much brighter prospects than the previous hapless Prime Minister. Trump has supported the new PM.
 
The RBA released the minutes of their last meeting and the outlook for growth was 'firmer', although their were downside risks. Members would consider further easing of monetary policy if economic conditions deteriorated further. The AUD was enthused by the news, rallying to 0.6775, while the NZD drifted to 0.6415. Analysts are now predicting up to 5 rate cuts by the Fed and the bond market has reflected this. US/China trade developments have been positive but remains a constant drag on commodity based currencies.
 
Look for Geo-Political developments in Europe with the G7 and meetings between Johnson, Merkel and Macron. US markets will be looking to Trump and his appearance at the G7 and to the Fed's Jackson Hole Central Bank Symposium.
 

Key Dates & Headlines

Weekly Market Calendar
 
19/8 NZ Services PMI, UK House Prices, Japan Trade Exports/Imports, NZ Dairy Auction, EU Current Account, EU CPI
 
20/8 Australia Consumer Confidence, RBA Minutes, EU Construction
 
21/8 NZ Credit Card Spending, US Weekly Mortgage Applications, US Existing Home Sales, FOMC Meeting Minutes,
 
22/8 Australia Services/Manufacturing/Composite PMI, Federal Reserve Symposium Jackson Hole, Japan Manufacturing PMI, France/German/EU Services/Manufacturing/Composite PMI, US Weekly Jobless Claims, US Services/Manufacturing/Composite PMI, Kansas City Fed Manufacturing Activity
 
23/8 NZ Retail Sales, Japan CPI, Fed Chairman Powell addresses Jackson Hole Symposium, US New Home Sales
 
 

Markets
 

*Indicative Rates only showing buy and sell midpoint

AUD/USD Graph