Australian dollar rally stalls
David Llewellyn-Smith | Aug 02, 2022 09:46
DXY is still falling as EUR bounces:
The AUD materially underperformed the DXY sag:
Oil dumped:
Dirt too:
And miners (LON:GLEN):
Plus all EM (NYSE:EEM):
Get The App
Yields fell:
But stocks did too:
Westpac has the wrap:
Event Wrap
US ISM manufacturing survey at 52.8 was above estimates of 52.0 (prior 53.0). The details showed a sharp pullback in both prices paid and new orders, and some slippage in employment, while inventories reached their highest level since 1984.
Eurozone manufacturing PMI was finalised higher at 49.8 (from a flash reading of 49.6), despite softer Spanish and Italian outturns. German retail sales in June fell 1.6%m/m (and -9.8%y/y – largest fall since 1980), against estimates of +0.3%m/m, as inflation, cost of living and growth concerns sapped consumer activity. Eurozone unemployment in June was in line with expectations at 6.6%.
Event Outlook
Aust: The RBA is expected to deliver a third consecutive 50bp rate hike at their August policy meeting, to 1.85%, lifting the cash rate quickly back to “neutral” territory with more still to come. With rates rising rapidly and building costs surging, dwelling approvals should see renewed weakness in June (Westpac f/c: -5.0%). The downturn in housing finance is expected to show through more clearly in June (Westpac f/c: -5.0%); affordability constraints are set to impact owner-occupiers more strongly than investor financing for the month (Westpac f/c: -5.5% and -4.5% respectively).
UK: Nationwide house price growth should begin to show some slowing in July as rate hikes begin to take effect (market f/c: 0.2%).
US: JOLTS job openings will continue to indicate an extraordinary demand for labour in June (market f/c: 11000k). Meanwhile, the FOMC’s Evans and Mester are due to speak at different events and the New York Fed will release its Q2 household debt and credit report.
Here’s the future of the ISM:
I am not a believer in the AUD rally.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.