Author: Rhys Miles
US stocks retreated last night after US Fed Chair Powell watered down the already slim possibility of a 50 point cut in interest rates next month. Despite being a remote possibility anyway last night’s reaction highlights how the markets are particularly edgy leading into the G20 and being driven by rate speculation rather than fundamentals. Tonight’s US Core Durable Goods take on greater significance than they otherwise would have as we approach Thursday’s US GDP.
Currency activity was somewhat muted overnight with the AUD trading a tight range around the mid 0.6900’s. The cross rates too remain close to yesterday’s levels against most currencies with the main contender for a move being the NZD with the RBNZ meeting at midday our time with a cut deemed unlikely but with a probability of a cut fully priced in over the next three months.
Again, as mentioned yesterday the potential for decent moves will come with US GDP tomorrow and the big one being the G20 on the weekend.
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