Today’s Key Market Drivers: 9th July 2019
US Dollar rises and stocks soften ahead of Fed Chairman’s Wednesday testimony.
Friday’s better than expected US jobs report has left markets questioning if the US Fed will indeed drop rates on July 31st and this saw the US Dollar benefit from this speculation on Monday and also saw global stock markets weaker on the first trading day of the week.
As I pointed out in my Sunday Pre-Market Video, I think the US Fed Chairman will give clarity on the Fed’s intentions when he speaks in Washington DC on Wednesday and Thursday this week. In fact, I think the markets will resume last weeks trend of stocks higher and the US Dollar lower simply because I have the view Jerome Powell will give enough forward guidance that the Fed is ready to drop the official cash rate by 0.25%. I may be wrong but I believe Powell gave enough of an indication two weeks ago to suggest the Fed was ready to drop rates in July and it is not the job of a Central Banker to change his tune inside a month. The Fed expects inflation to soften and that’s enough for me to believe they will drop the official cash rate in July.
Asian markets sink on the first trading day of the week.
Monday saw Asian stock indexes lose the most ground with the leading Japanese, Chinese, Hong Kong and Aussie indexes down well over 1%. It amazes me sometimes why stock markets sell off so hard when there was no catalyst for such a sharp one-day correction. Sure, the US jobs number on Friday beat the markets estimates but the sell-off throughout Asia was not on anything more than some speculation that the Fed may not adjust rates higher on July 31st.
Australia’s major miners BHP and Rio Tinto were the major draggers on the Australian market which dropped 1.17% after a report was released about a probe into Chinese Steelmakers after a recent surge in Iron Ore prices.
The Aussie Dollar maintained its current level of 0.6972 just above the key 4-hour 200 EMA level. Both the AUD v USD and NZD v USD are sitting right on their respective 200 EMA’s and I don’t expect any impulsive moves higher or lower until Powell speaks on Wednesday in the USA.
No high impacting data scheduled for Tuesday.
Markets will likely stay in their current risk-off trading mood on Tuesday with no high impacting news scheduled. The latest NAB Business Confidence number is due at 11.30am AEST, however, I don’t expect it to move the AUD by more than a few ticks. To be frank the markets may be a yawn today.
Helpful Forex Tip. How to stop self-sabotaging your account.
With not a lot of “new” news around this Tuesday, I have put together a video that shares two simple tips that will improve the probability of you, not self-sabotaging trades. Exiting early and letting losing trades run are two of the most common errors made by traders (professionals included). Here are a couple of tips that I know will help you over time.
Have a great week and please make your risk management your #1 priority.
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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