AUDUSD Day’s Range: 0.73701 – 0.74160
Yesterday’s data showed a strong Australian trade surplus for June with the seasonally adjusted balance on goods and services surplus increased $1,277 million to $10,496 million. This is primarily driven by the strong export figures to China as Iron Ore prices bolstered the numbers.
Investors are anticipating strong U.S. non-farm payroll reports today, resulting in a rally in the stock, treasury yield, and demand for USD. Investors were surprised by the weak ADP private payroll number but their concern eases by other data. The number of people on state jobless rolls dropped in late July to ties lowest level since March 2020. Economists are expecting another month of strong payrolls gain. Other reports also suggest a strong non-farm payroll in June. Service sector ISM hit a record high as the employment component increases. Challenger reported the fewest job cuts in 21 years and Conference Board showed that consumer confidence has hit a pandemic high.
USD is expected to rally against major currencies if non-farm payroll exceed last month’s 850K and the unemployment rate drops from 5.9%. if payroll rises less than 800K then there might be a sell-off in the USD.
Stocks rise as jobless claims dropped in the U.S. with S&P 500 gained 0.6%, the Dow Jones Industry Average advanced by 0.8%, and NASDAQ Composite rose 0.8%. The yield on the benchmark 10-year Treasury note rose from 1.183% to 1.217% on Wednesday.
Data:
- AU June Trade Balance : 10.50 Bio v. 10.55Bio exp.
- EU June German Factory Orders : 4.1% v. 2.1% exp.
- UK Bank of England Rate Decision/Statement : 0.10% v. 0.10% exp. (no change)
- US Weekly Unemployment Claims : 385K v. 382K exp.
Major moves in the market:
Stocks
- The S&P 500 rose 0.6% as of 4 p.m. New York time
- The Nasdaq 100 rose 0.7%
- The Dow Jones Industrial Average rose 0.8%
- The MSCI World index rose 0.4%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.1836
- The British pound rose 0.3% to $1.3931
- The Japanese yen fell 0.2% to 109.75 per dollar
Bonds
- The yield on 10-year Treasuries advanced four basis points to 1.22%
- Germany’s 10-year yield was little changed at -0.50%
- Britain’s 10-year yield advanced one basis point to 0.52%
Commodities
- West Texas Intermediate crude rose 1.5% to $69.20 a barrel
- Gold futures fell 0.4% to $1,806.70 an ounce
Upcoming data:
- AU July AIG Services Index : 57.8 prev.
- AU RBA Gov. Lowe to speak
- AU RBA Statement on Monetary Policy
- CA July Employment Change & Unemployment Rate : 148.5K & 7.4% exp.
- US July Average Hourly Earnings & Non-Farm Employment Change : 0.3% & 870K exp.
- US July Unemployment Rate : 5.7% exp.
- US July Ivey PMI : 67.3 exp.
Disclaimer:
The market update provided by Corporate Alliance FX (CAFX) is for reference only and does not constitute a bid, levy, offer or invitation to offer for the financial product, the basis for any contract or commitment, a recommendation for the purchase or sale of any investment instruments, financial, legal, tax, investment advice, investment advice or other opinions. It will not be legally liable for any consequences or losses caused by the information or content involved.
Corporate Alliance Group Pty Ltd T/A Corporate Alliance FX (CAFX) (ABN 58 167 119 226, AFSL 523351) (i.e. CAFX), CAFX independently holds the Australian Financial Services licence no. 523351 (AFSL), so CAFX is regulated by the Australian Securities and Investment Commission (ASIC) and, and although ASIC is a strictly regulatory body, it does not endorse a specific financial product. ASIC’s regulation of CAFX applies to all services under the financial licence held by CAFX, including the issuance of foreign exchange settlement, foreign exchange payments, foreign exchange risk control, hedging, market making and providing financial advice.