by Nicholas Cork
Markets overnight were calm in thin conditions, with the USD making gains for the 3rd consecutive day against most of its G10 peers. The stronger US data from Friday bolstered traders, and a weak EURO sentiment survey and very weak UK manufacturing data kept the USD on the front foot. The UK data was an additional blow to the GBP after Nissan had announced they will now not build a new car in the UK, and as a result the GBP has had its lowest close for a week near 1.3000. Brexit chats are still ongoing with Theresa now due to visit Northern Ireland.
US data later in the day for factory orders and durable goods was weak but went largely unnoticed as the focus was still on Fridays data, and the USD remained elevated and US treasury yields rose across the curve. The DOW spent the first half of the session flat but rallied into the afternoon session on anticipation of more strong tech earnings and is currently up 175 points, and in fact the Morgan Stanley index of global stocks has closed the session at 2 month highs.
Locally, the Building Approvals data release spooked the market with its large negative headline number and helped push the AUD down to the low 72’s overnight, (with some help from the Royal Commission report), but some caution ahead of the more reliable Retail Sales numbers today before the RBA rate announcement this afternoon. The big 4’s share prices’ all closed a few percent above their day lows and will be watched closely at the open today, as will any developments in the US China trade discussions.
AUD vs DOW JONES
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