Today’s Key Market Drivers: 16th May 2019
Pound falls to new lows.
Traders took to the Pound on Wednesday selling it off to new lows as Brexit woes return to bite the British currency as the bitter divide between the Conservatives and Labor continues. Traders are again worried Prime Minister May won’t be able to pull together a deal and you can bet your bottom dollar that Labor will do whatever it can to stall the process and attempt to drive May out of office before the October deadline. The UK has until October to come up with a new plan and given it had over two years previously and now has just 4 months; I expect the negotiation will go down to the wire once again and May’s leadership will be strained. If she can’t get a deal done her tenure as PM will be over.
Bloomberg terminals report that sentiment around the Pound is turning negative once again.
Aussie Unemployment numbers are expected to show 15,000 jobs were created in the month of April.
The latest Australian jobs figures are set to be released at 11.30am AEST today with the market expecting the official unemployment rate to remain steady at 5% and approximately 15,000 jobs to have been created in the month of April. If the official figures are out of line with expectations the AUD will be volatile and could move up to half a cent within minutes of the numbers being released. I have no doubt both sides of politics will be closely watching the numbers for any opportunity to win votes leading up to Saturday’s Federal Election.
Australian wages on an annualised basis grew by 2.3% when data was released on Wednesday. This met the market estimates so the AUD was not sold off on the wage news. However, 30 minutes later the AUD was on the skids as a slew of Chinese economic data hit the market and was under economists’ expectations. Retail Sales and Industrial Production numbers missed estimates and therefore traders chose to sell the Aussie Dollar as it is seen as a proxy for China. Anything weak out of China is going to drag on the AUD.
The market was concerned Wednesday that Trump was about to lash out on Europe with more tariffs.
The Dow Jones was down 190 points at one stage on Wednesday on fears the Trump administration was about to announce higher tariffs on European auto imports and other goods and services. Those fears were somewhat alleviated when leading financial news agencies ran stories that Trump officials said that any new tariffs on European auto imports would be delayed by at least 6 months. The reports saw the slide on US indexes reverse immediately with the Dow Jones closing the trading day up 115 points or 0.45% and this is also the news that drove the Yen back lower.
Economists and analysts continue to run the numbers on what the higher tariffs will do to global GDP figures and in particular US and China GDP figures. My expectation is that if GDP begins to slow in the USA there is no question Trump will be screaming for interest rate relief and the Fed may be forced to lower rates and this would lower the US Dollar. I expect plenty of up and down volatility in coming weeks.
Instead of saying “I don’t have time” try saying “it’s not a priority” and see how that feels.
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).
If you would like to speak to one of our Senior Client Advisors regarding the relative client opportunities offered at LTG GoldRock and how you can follow along with our Professional traders each day in our live trading room please contact us today or you can register for one of our a live coaching and trading webinars by clicking here.