Today’s Key Market Drivers: 18th June 2019
Traders will be mindful of the RBA monthly minutes due today.
Traders will be mindful of what may be inside the RBA June monthly minutes when they are released this morning at 11.30am AEST. The RBA dropped the official cash rate from 1.5% to 1.25% on the first Tuesday of the month and the AUD v USD has lost over 1 cent in value since. The monthly minutes today could give traders a closer indication as to when the next RBA cut may be with futures markets pricing in a 100% likelihood the Central Bank cuts rates again before the end of the year.
Keep in mind the US Fed’s statement at 4.00am AEST Thursday morning is the elephant in the room this week and my expectation is the market may begin to once again price in the likelihood of a rate cut at the Fed and the Greenback may fall in value in the lead up to the Fed statement.
US Dollar slips on Monday.
The US Dollar slipped back lower against the Euro through the morning and mid-afternoon trading session in New York although Mario Draghi the ECB President is about to speak in Portugal as I write and it is unclear what he may say in his opening address.
As I mentioned in Monday’s report, it is unlikely investment banks and hedge funds will risk putting on large positions ahead of the Fed statement and trading volumes where lighter on the first trading day of the week. There will certainly be some up and down volatility leading into the statement, however, it is unlikely we will see any impulsive moves on any of the major pairs prior to the Fed statement.
Some traders are suggesting economists are getting too far ahead of themselves with suggesting a rate cut is coming in July. The reality is anything could happen Thursday morning at 4.00am AEST and it is not beyond reasonable expectation the Fed may even pull the trigger in June and surprise traders with a rate cut.
Euro Zone CPI expected to be 0.8%.
Amongst two speeches from Mario Draghi and one from BOE Governor Mark Carney traders will also digest May Euro-Zone Inflation data Tuesday which is expected to be 0.8% YOY (year on year) or 0.2% for the month of May.
If the inflation data is below or above these numbers’ traders may use the out of line with expectation data to trade the Euro higher or lower in the short term, however, I expect any move to be reasonably short and sharp and not impulsive.
Pound lower as Boris shapes up as the front runner to be the next UK PM.
If bookies are correct Boris Johnson will be the next UK Prime Minister and traders are at this point keeping the Pound subdued and moving lower as some are fearful Johnson, if he was to become Prime Minister, could see the UK leave the European Union without any Brexit deal.
Never give up on a dream just because of the time it may take to accomplish it. The time will pass anyway.
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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