Market Watch AU – 25th January 2024
The AUDUSD managed to climb over 0.66-cents once again, as the barometer of sentiment returned following a China announcement for reduction in amount of funds banks need to hold for capital requirements. Also in the mix is a request by China policy makers to mobilize around 2tn Yuan from offshore state owned enterprises as part of a stabilization fund for onshore share purchases. What seems to be limiting further gains for the AUD is the increasing expectation that the RBA will be maintaining its current policy levels at the Feb meeting following a decline in inflation last month and a moderating labour market. The US-dollar also has regained some strength this week, as investors revise their expectation for rate cuts from the Fed, both in timing and quantity, for this year. Looking ahead today, a light Asia economic data calendar will have day traders looking for similar support and resistance levels on the AUDUSD. Continuation of support at 0.6500/25 on any pullback, with rallies to find resistance and supply through 0.6605/20 once again.
Wall Street saw the S&P500 set another record high over the day as Netflix quarterly results and a strong report for ASML leading chipmakers sparked a surge in interest for the market. The DJI was just ahead at +0.01% over the session, while the S&P500 gained +0.4%, and the Nasdaq was up +0.7% for the day. Australian shares are set to carry on the overnight enthusiasm from Wall Street today, with possible gains from tech and commodity shares.
Gold prices traded lower after US data revealed strong business activity in December and as investors re-assess the timeline for policy cues out of the Fed later this year on the back of further data releases later this week.
Copper prices gained on the LME on improved expectations that China will release stimulus measures to boost their economy. Iron ore futures steadied, as data showing inventories have been piling up at Chinese mills stemmed enthusiasm for the steel demand outlook. Chinese steel mill stockpiles are at their highest since October. That’s a strong signal steel consumption remains languid during China’s winter seasonal lull. .
Brent Crude prices made gains over the day following a higher than expected draw on US crude inventories coupled with a fall in their crude output, all the while geopolitical tensions in Europe and the Middle East add to the softer supply outlook.
Open today 0.6577
Yesterday’s Range 0.6566 / 0.6621
Open today 0.6111
Yesterday’s Range 0.6089 / 0.6149
Yesterday’s Range 1.0753 / 1.0796
Yesterday’s Range 0.6041 / 0.6068
Yesterday’s Range 4.7086 / 4.7307
Yesterday’s Range 0.5169 / 0.5192
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