RBA Comments on Potential QE
Orbex Market Flash
USD Higher Ahead of Data
The US dollar has been higher again today with the USD index trading 98.25 last, moving back up towards recent highs. Later today traders receive the CB consumer confidence number for last month which is expected to have ticked higher. Should we see an increase, USD is likely to continue higher.
EUR Higher on Better Data
EURUSD has been higher today, despite the strength in USD. Yesterday, the German Ifo business survey released yesterday came in higher than market forecasts at 95 vs 94.9 expected and 94.7 prior.
German data has been one of the key drivers of EUR downside over recent months and despite the mild beat, the outlook is still subdued, keeping the outlook for EUR weighted to the downside. EURUSD trades 1.1017.
GBP Falls On Brexit Wobbles
GBPUSD has been lower today, weighed on by USD strength. The UK elections continue to be the main market focus. Recent polls show that the Conservative party lead over the Labour party (main opposition) has now narrowed to 7%.
A Conservative win is seen as the clearest path to delivering a Brexit deal. With just over two weeks to go until the elections, polling results and incoming headlines will continue to drive price action. GBPUSD trades 1.2854 last.
SPX Backs Away From Highs
Risk assets have softened a little today, with the SPX500 falling back below the 3132.56 level. Yesterday, the index broke out to fresh, record highs on news that the US and China’s top negotiators spoke yesterday about resolving outstanding issues. The news is keeping expectations of a forthcoming trade deal well supported.
Safe Havens Rising
Safe havens have been a little firmer today with both gold and the Japanese Yen strengthening against USD. Concerns over the health of the US-China trade negotiations continue to see fluctuations in risk flows.
However, the latest comments appear supportive, offering limited upside for safe havens. JPY trades 108.94 last, down off yesterday’s highs. XAUUSD trades 1458.17 last, sitting just above the week’s low for now.
Oil Giving Back Gain
Oil prices have been a little higher today. But, gains are retracing now on the pullback in equities. Focus remains on whether the US and China will sign a trade deal which, for now, remains the base case scenario and should support higher oil prices. Later today, traders receive the latest API crude report ahead of tomorrow’s headline EIA report.
USDCAD has been higher today, rising on the back of a stronger USD. The move has been further supported by the softening of this morning’s gains in crude. Looking ahead for the rest of the week, the Canadian GDP print on Friday is the key domestic release to note. USDCAD trades 1.3314 last.
RBA’s Lowe Considers QE
AUDUSD has been back under pressure today. despite the supportive news yesterday that US and Chinese officials spoke on the phone to keep negotiations moving.
Speaking overnight, RBA governor Lowe commented today that the bank could potentially use QE to further its monetary policy goals and also said that more fiscal easing should be used. AUDUSD trades .6775 last.