Author: Steve Oram
The AUD opens relatively flat today with little data out overnight. RBA Meeting Minutes will be released this afternoon following their recent rate cut earlier in the month. Expectations are high that the minutes will support a further cut in July, the recent rise in Unemployment rate to 5.2% will have certainly given the Board further thought to more cuts.
US Business Conditions Hit Biggest Decline in 2-Years
The USD fell, under pressure after the New York Federal Reserve’s Empire State business conditions index declined in June, tumbling into a negative read for the first time in more than two years. Headline general business conditions index plummeted by twenty-six points, the largest monthly decline on record to -8.6. New orders retreated while shipments increased modestly.
Markets largely brushed this off as focus remains on the Federal Reserve rate announcement on Thursday morning. Market participants are approaching Wednesday’s FOMC meeting with caution as the meeting will set a tone for near to medium term market outlook. Positioning has moved dramatically towards a dovish outlook from the Federal Reserve as Friday’s consumer data has given markets pause expecting the Fed to keep rates on hold and will be watching for an indication on future rate cuts.
Pound Falls as Boris Johnson’s Lead Rises
Boris Johnson received a boost in his campaign to replace British PM Theresa May when one of his previous rivals and EU supporter Matt Hancock backed him, commenting “he was almost certain to win the contest”. Boris has promised to lead the UK out of the EU with or without a deal, however parliament has indicated it will try to stop a no-deal Brexit which would lead to further chaos and uncertainty.
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