Today’s Key Market Drivers: 14th June 2019

US markets rebound as Trump blames Iran for Oil tanker attacks.


US markets rebounded on Thursday after three consecutive days of declines. The sentiment was back to being “risk on” even after the Trump administration accused Iran of attacks on Oil tankers in the Gulf of Oman. The S&P 500 closed up 0.25% but the range was tight and without any real conviction.

The trading ranges in currency markets were also tight with no high impacting news to give traders any reason to start an impulsive move on a base currency.

Have Americans been spending less?


We will find out this Friday when the latest US Retail Sales number is released.

Recent inflation and other economic data numbers suggest the US economy is beginning to slow and Friday’s Retail Sales number could give traders another reason to sell off or buy back the US Dollar.

The market is expecting US Retail Sales to have risen 0.7% vs the -0.2% the previous month. Any fall in the retail sales number is likely to see traders sell down the US Dollar and continue to rally stock markets.

Australian Dollar slumps back lower after the unemployment rate rises.


The official unemployment rate rose from 5.1% to 5.2% in May albeit confirming another interest rate cut is on the way down under. The RBA recently stated in its monthly monetary policy report that if the jobless rate rose the RBA would be forced to cut interest rates. They dropped the cash rate from 1.5% to 1.25% on the first Tuesday of June and I suspect the Australian economy will get another cut in July or August.

It’s going to be an interesting few months ahead as both the RBA and US Federal Reserve are now under pressure to drop interest rates from current levels. Theoretically, both currencies should be weak so it will be a game of cat and mouse when it comes to trading the AUD v USD.

Today’s economic calendar.


China will release its latest Retail Sales and Industrial Production numbers and these have the potential to impact the AUD if out of line with expectation. The Bank of England Governor Mark Carney is speaking in London and any forward guidance on interest rate policy will be jumped on by traders. In the US trading session, it is Retail Sales and a University of Michigan sentiment survey release that will be closely eyed.

Unless the US Retail Sales number is far better than expected I don’t see any reason why traders have reason to sell down stocks and get all fearful and negative again. All things being equal we should trade positively on stock indexes into the weekends closing bell.


Die with memories not dreams.

AB

 

About the Author: Andrew Barnett

Andrew is a professional trader and successful investor who has a strong focus on education. He is a regular Sky News Money Channel Guest and one of Australia’s most awarded and respected financial experts and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Director at LTG GoldRock, Andrew Barnett, guides thousands of traders around the world in the live market on a daily basis, advising them on buy and sell directions, as well as trading his own personal account. Andrew, a regular keynote speaker at trading and wealth-creation events throughout the Asia Pacific region, is an authorized representative registered with the Australian Securities and Investment Commission (ASIC).

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