Today’s Key Market Drivers: 31st May 2019
US first-quarter GDP misses estimates at 0.5%.
US financial markets remained stable on Thursday following weaker than expected first quarter GDP which came under the estimates at 0.5% vs the 0.9% the market expected. The S&P 500 closed up 0.21% snapping this week’s losing streak. The rally was nothing to write home about and persistent trade winds continue to worry investment banks and hedge funds as they continue to price in their expectation of a rate cut at the Fed later this year.
The closely watched US 10 Year Treasury Yield that started the month at 2.5% fell in May to a 20-month low of 2.2% signalling the market is beginning to turn pessimistic.
Currency values mostly flat on Thursday.
The market was busy taking its pulse on Thursday as currency values ranged up and down without any major impulsive moves in either direction. The Aussie and Kiwi Dollars continue to threaten to break out to the upside but once a small move begins they are like a turtle who has his neck out and then tucks in back in.
Today sees the latest China Manufacturing figures which are due at 11.00am AEST and if out of line with expectations will see traders sell off or buy up the local currency. Today’s China PMI figures will be closely watched as they are the first set of manufacturing numbers post the increase in US trade tariffs to 25%.
There is plenty of high impacting data to come today through the European and US trading sessions with German Retail Sales & CPI, Canadian GDP and a US Personal Consumption Expenditure reading. Anything out of line with expectation will be jumped upon so make it your business to know why the price is moving.
Euro and Pound remain under pressure.
The Pound has arguably been the biggest loser this month as Brexit fears and political uncertainty gripped the UK once again. With another 5 months until the UK is due to have a Brexit deal sorted they are going to need to decide on a new Prime Minister then whoever that is will need to submit a very different Brexit proposal if they are any chance of seeing the UK exit the EU with a deal.
The Euro has remained under pressure throughout the month mainly to do with the rise of Eurosceptic political parties in the recent Euro Area parliamentary elections. Concerns about Euro Area growth has also weighed on the currency and with the US economy so resilient the EUR v USD has struggled to gain any attention from buyers.
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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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