By Rhys Miles
Not even ten days into the new year and the markets are demonstrating the highs and lows if not volatility, that is usually more prevalent further into the year. After Iran’s “proportional response” missile strikes on two US military bases and Trump’s “all good” tweet the market has taken a deep breath and leapt back in. Supported of course by comments from both Iran and the US that neither wanted all out war. In response, oil has lost all of its gains from the previous two sessions and gold has fallen one percent.
The Dow finished up close to half a percent with the relief rally well supported by the overnight release of the ADP Non-Farm Employment report which beat forecasts considerably. This data supports the general view that the US economy is defying long held speculation of a downturn.
Locally, our Building Approvals data surprised to the topside expanding by 11.80% against expectations of a 2.10% increase. The AUD has improved only slightly against the USD now firmly stabilised at the near low of recent ranges around 0.6860. On the crosses particularly the AUDNZD continues to looks quite weak.
Today will see the release of our trade balance figures with Retail sales out tomorrow and US Non Farm payrolls Friday night.
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