Today’s Key Market Drivers – 16th November 2017
Oil and commodity prices slump.
The Aussie Dollar began falling on Wednesday around 10.30am following a weaker than expected Westpac Consumer Confidence reading which was -1.7%. One hour later the AUD was dealt another blow with further declines in the Wage Price Index. Adding to the negative economic data was falling oil and commodity prices which saw the AUD v USD close another daily candle below a key trend line support level. Please ensure you watch today’s video update to see the key support level that has been broken. At 11.30am AESDT today we will see the release of the official October Unemployment Rate and Employment Change. If the numbers are below the market’s expectations then the AUD v USD could move up to half a cent lower and the reverse if the report is better than expected. Whatever the unemployment rate and employment change numbers are today it does not change my medium to longer-term view of the Aussie Dollar falling against the US Dollar, Euro, and Pound.
The US Dollar rebounded Wednesday after its recent sell-off thanks to better than expected October Retail Sales and a jump in the underlying inflation rate. Traders and economists have priced in a 100% chance the US Fed raises rates in December, however, Wednesday’s better than expected inflation reading is the first for some time and will begin to raise expectations that the Fed could lift rates in December and then 3 or 4 times in 2018. Currently, the market expects the Fed to lift rates once in December and a minimum twice in 2018 but if inflation continues to pick up interest rates in the US will rise faster and so will the US Dollar. What traders will want to see in December is the Fed’s Dot Plot Survey which tells the market how many times it expects to raise rates in the coming 12 months.
Keep an eye on stocks because if they continue to slide further south the Yen is going to rise in value. US and European stock indexes were down again Wednesday and there is going to be an increasing number of investors starting to think. “I may as well sell now, the market is due to correct”. The mindset of the herd is always the same and consistently repeats. A sell-off through November before a small Santa rally into Xmas and a pullback in January. That’s my prediction. The stock market has been looking for a reason to sell off and when you throw in the mix Xmas is less than 50 days away trades mindsets may be “lock in what I have made in 2017 so I can get paid before the end of the year”.
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 key-note 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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