Author Rhys Miles
Risk on one day, risk off the next. The AUD is starting to look like a shot duck now that it has broken through key support at 0.6670. Not just a stronger USD ( 3 year highs) but the AUD has fallen victim to the re-emergence of a risk off mood that is dominating equities and financial markets in general over the last 24 hours. The catalyst was an increase in the number of virus cases detected in South Korea and a couple of deaths in Japan, countries where the reporting of the virus can actually be relied upon.
As expected and alluded to yesterday the People’s Bank of China lowered its 1 and 5 year prime lending rate by 10 and 5 points respectively. The PBOC has consistently stated they will take every measure to bolster their financial system whilst the uncertainty of the coronavirus continues.
Yesterday, locally our employment data disappointed with the unemployment rate edging higher to 5.30% with the underemployment rate also climbing. The ASX lost considerable ground from its impressive intraday highs to finish marginally higher.
Quite a deal of PMI data coming out of the UK, USA and Europe tonight and will be watched very closely by the markets for any coronavirus driven impact on manufacturing activity.
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