AUD/USD Day’s Range: 0.74164 – 0.74625
Investors start to be aware of the potential significant slowdown in the growth for the second half of 2021 and the market is moving away from risk assets. The Governor of RBA, Lowe, focused on labour market and how it will impact their monetary policy decision-making in his speech yesterday. RBA seems to maintain its current policy with an inflation range of 2 to 3 percent and a cash rate target at 10 basis points in order to achieve the goal of full employment. There are still uncertainties to this policy, especially with the recent outbreak of the Delta variant in NSW.
The global stock market dropped on Thursday due to concern about the economic prospect. The S&P 500 slipped 0.9%, with economically sensitive industrial and material sectors dropped the most. Nasdaq 100 fell 0.6% and the Dow Jones Industrial Average slipped 0.8%. Investors are selling risky assets and move to safer returns of government bonds.
What to Know
U.S. jobless claims unexpectedly rise last week, but the continuing claims dropped, indicating the recovery of the labour market from the COVID-19 pandemic continues to be choppy. The economist at JPMorgan said that it looks like the trend for fillings keeps moving lower over time.
Major moves in the market:
Stocks
- The S&P 500 fell 0.9% as of 4:01 p.m. New York time
- The Nasdaq 100 fell 0.6%
- The Dow Jones Industrial Average fell 0.8%
- The MSCI World index fell 1%
Currencies
- The Bloomberg Dollar Spot Index fell 0.2%
- The euro rose 0.5% to $1.1847
- The British pound fell 0.1% to $1.3785
- The Japanese yen rose 0.8% to 109.78 per dollar
Bonds
- The yield on 10-year Treasuries declined two basis points to 1.29%
- Germany’s 10-year yield was little changed at -0.31%
- Britain’s 10-year yield advanced one basis point to 0.61%
Commodities
- West Texas Intermediate crude rose 1.3% to $73.13 a barrel
- Gold futures were little changed
Data:
- US Weekly Unemployment Claims : 373K v. 345K exp.
- US EIA Crude Oil Inventories : -6.9Mio v. -4.0Mio exp.
Upcoming data:
- CN June CPI & PPI : 1.3% & 8.8% exp.
- UK May Manufacturing Production : 0.9% exp.
- EU ECB President Lagarde to speak
- UK Bank of England Gov. Bailey to speak
- EU ECB Monetary Policy Meeting Accounts
- CA June Employment Change & Unemployment Rate : 172.5K & 7.8% exp.
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