Today’s Key Market Drivers: 21st May 2019
Markets start the week on the back foot.
With no high impacting economic news to gather trader’s attention focus returned to the lack of development in the China / US trade negotiations and recent comments that President Trump has made towards Iran. Trump Tweeted on Sunday that “If Iran wants to fight, that will be the official end of Iran”.
CBNC reports this morning that China on Monday accused the United States of harbouring “extravagant expectations” for a trade deal. The comments appear to send a clear message that any trade deal is a long way off and the G20 summit in Japan at the end of June is going to loom as an important “save the deal” meeting between both President Trump and Xi.
As I write Fed Chair Jerome Powell is due to speak in less than an hour and traders will be eager to hear the Fed’s thinking on future interest rate adjustments. I believe the Fed wants to continue to raise rates but the market will be keen to hear Powell’s thoughts on how the new tariffs China has imposed on US exports will impact the economy. I am looking for a bullish speech from the Fed Chairman which would help drive the US Dollar higher.
RBA minutes could close the gap on the AUD.
The latest monthly minutes from the last RBA meeting will be released at 11.30am AEST this morning and with the gap still not yet closed on the AUD the minutes and US Fed Chairman’s speech threaten to push the AUD back lower where ultimately, I believe it’s destined to go.
The RBA kept the official cash rate steady at 1.5% this month when more than 50% of the market expected a rate cut. The first Tuesday in June is when the next RBA rate decision is due and the minutes today at 11.30am followed by a speech from Governor Graham Lowe 45 minutes later could be the catalysts for another move back below 0.69c and closure for the gap traders.
Euro Area OECD Economic Outlook released today.
The OECD Economic Outlook is published twice a year by the Organisation for Economic Co-operation and Development and gives economic analysis and forecasts for future economic growth. Today sees the latest report released and whilst most of the good and bad news has already been priced into the market any comments that are seen to be out of line with expectations could move currencies directly related to the report.
The market in my view has bigger fish to fry and whilst the OECD Economic Outlook is slated as a High Impacting news number it isn’t likely going to send traders to the buy and sell buttons with any gusto. I expect it to come and go without a whimper.
Self-discipline is about controlling your desires and impulses. If you want to improve yours then it starts with getting up early every day.
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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