Market Watch APAC – 16th May 2024
Markets have been holding their breath in anticipation of the US CPI release for the month and they were pleased with what they got. The US April CPI came in at +0.3%, which was better than the 0.4% expected. The US-dollar has retreated against the G10 counterparts and US Treasury yields also. Markets have quickly brought forward expectations for the Fed to cut interest rates and now want two 25bp cuts in their forecasts. The mood has sent risk sentiment higher across equities and currency markets and the AUDUSD, a bellwether for risk, has rallied through the its recent resistance levels, to trade in the 0.6690’s overnight. Today’s release of the Australian employment data will be next possible catalyst for further gains, so traders will be attentive to its release this morning. Expectations are for +23.7k new jobs while the unemployment rate is looking to tick up to 3.9%. The AUDUSD opens the Asia session in the 0.6690’s, and looking to challenge the 0.67-cents if employment follows expectations. Support now shifts to 0.6645/55 on any immediate pullback.
Wall Street indices tracked higher after the latest release of the US inflation data came in at a lower than anticipated increase for the quarter, suggesting there will be room for rate cuts soon. The DJI was up +0.7%, the S&P500 gained +1%, and the Nasdaq gained +1.3% for the session. Australian shares will open higher today driven by much improved risk sentiment following the news of more favourable inflation data out of the US.
Gold prices got a lift from a weaker US-dollar and Treasury yields slid on the prospect that the Fed will be cutting interest rates sooner than previously anticipated by the market.
Copper prices rallied higher , principally on a the tail of a weaker US-dollar, while traders continue to also arbitrage the spread between LME and CME bouses. Iron Ore prices slipped lower as seasonally softer demand in China curbed the outlook and the US imposing increased tariffs on some China products denting the mood.
Brent Crude prices rose for the day despite an International Energy Agency report that downgrades the global oil market growth demand.
| AUDUSD
Open today 0.6694 Yesterday’s Range 0.6622 / 0.6695 |
NZDUSD
Open today 0.6122 Yesterday’s Range 0.6037 / 0.6124 |
AUDNZD
Yesterday’s Range 1.0898 / 1.0978 |
| AUDEUR
Yesterday’s Range 0.6118 / 0.6154 |
AUDCNH
Yesterday’s Range 4.7875 / 4.8321 |
AUDGBP
Yesterday’s Range 0.5251 / 0.5280 |
