Market Watch AU – 3rd January 2024
The AUDUSD got a lift during Asia yesterday, bolstered by a improvement in the latest release for China Caixin Manufacturing PMI for December, which added to risk appetite for the session. This however was short-lived and overnight the pair has been driven lower on higher US-dollar and US Treasury yields, as traders temper expectations for Fed rate cuts this year. The move back below 0.68-cents sees the pair navigate to the major support at 0.6750. These moves are probably exacerbated somewhat by thinner trading volumes, as markets slowly return from holiday mode. Day traders will watch these levels closely for any further weakness, as markets gear up for the US Non-farm payrolls on Friday. The initial support level is seen at 0.6750 with further weakness allowing a move to 0.6725/35 behind, while initial supply should be seen on a move to 0.6780’s and 0.6810 behind.
Wall Street finishes the opening session of the year lower, as US Treasury yields ended higher with investors revising their expectations for US rate cut dot plot this year. The DJI posted a +0.08% gain, while the S&P500 lost -0.6% and the Nasdaq dropped -1.7% for the day. Australian equities are set to start the day lower, weighed down by energy shares on the back of softer oil prices and tempering rate moves this year from central banks.
Gold prices had rally to start the year buoyed by expectations of possible rate cuts from the Fed this year and geopolitical concerns continuing with the added concerns for the latest attacks on shipping through the Red Sea.
Copper prices finished the day steady as positive China data countered stronger US-dollar moves. Iron Ore futures on the Dalian exchange continue rallied on strong Manufacturing PMI data out of China and added expectations for restocking by steel makers ahead of their holiday period.
Brent Crude Oil slipped lower on US interest rate nerves and a tempering of how the Red Sea tensions on shipping will disrupt supply.
Open today 0.6761
Yesterday’s Range 0.6757 / 0.6839
Open today 0.6252
Yesterday’s Range 0.6249 / 0.6328
Yesterday’s Range 1.0770 / 1.0832
Yesterday’s Range 0.6163 / 0.6200
Yesterday’s Range 4.8317 / 4.8531
Yesterday’s Range 0.5347 / 0.5374
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