Market Watch APAC – 14th February 2024
The US-dollar rallied to a three month high against its major peers after a standout CPI release for January that has markets re-pricing for further delays in possible rate cuts by the Fed, to possibly even June. US CPI rose by 0.3% mom in January, above the expected 0.2% and 3.1% yoy which was also above expectations of 2.9%. The greenback and US Treasury yields quickly responded to the data as traders recongnise the Fed’s purposefulness to wait for further confirmation that inflation is contained before considering rate cuts. US retail sales is out tonight and will be ‘front and centre’ for analysts, for signs of economic resilience and further underpin a higher US-dollar. The AUDUSD has been deflated from its buying interests above 0.65-cents and pressured back to the softer end of the range at 0.6450/60’s. This would leave the door open for further declines as the fundamentals of declining Copper and Iron Ore prices and the ever present uncertainty of the China economy takes hold. There is no economic data for Australia today so expect traders to look to USD moves and their Retail Sales release tonight. The AUDUSD has seen a break of the 0.6470/90 support zone and now looks to pressure the 0.6440/50 where a failure to hold could open up a deeper decline below 0.64-cents. On the flipside, day traders will be looking to sell into any strength towards 0.6500/15 zone initially.
Wall Street and global stock indices dropped back after the higher than expected release of the US Inflation data which pushed back investor expectations of a near-term rate cut from the US Fed. The Nasdaq however after having a solid run on Friday, returned some of the gains in Monday’s session The DJI fell-1.5%, the S&P500 dropped -1.5% also, and the Nasdaq retreated -1.7% over the session. Australian shares are set to open sharply lower today, following the lead of their global peers, as investors push back any chances of imminent rate cuts by the Fed.
Gold prices have dipped below $2000 as US-dollar and Treasury yields rallied in response to the US CPI release overnight.
Copper prices eroded earlier session gains after the CPI news and the US-dollar stretched higher. The LME was up just +0.1% at session close. The Dalian commodities exchange remains closed for Chinese Lunar New Year Holidays.
Brent Crude prices were back to positive gains for the day as political tensions and Middle East conflicts continue to be the imminent concern for adequate supply.
| AUDUSD
Open today 0.6453 Yesterday’s Range 0.6443 / 0.6535 |
NZDUSD
Open today 0.6061 Yesterday’s Range 0.6050 / 0.6133 |
AUDNZD
Yesterday’s Range 1.0645 / 1.0693 |
| AUDEUR
Yesterday’s Range 0.6021 / 0.6063 |
AUDCNH
Yesterday’s Range 4.6605 / 4.7139 |
AUDGBP
Yesterday’s Range 0.5121 / 0.5173 |
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