Author: Dennis Li
After US President Trump said he is open to an interim trade deal, China announced that it will exclude imports of US soybeans, pork and other farm goods from additional trade war tariffs. Although the US-China trade tension was improved, the trade war between the world’s two largest economies remains a source of uncertainty.
On Saturday a coordinated drone attack hit the heart of Saudi Arabia’s oil industry, forcing the kingdom to cut its oil output in half and pushed oil prices up for more than 10%.
Over the weekend we saw the AUD find its support at 0.6875 against the USD, while remaining well supported above 0.6200 against the EUR. The main focus this week will be the US Fed meeting Tuesday/Wednesday. The Fed fund futures have fully priced in a quarter point rate cut and see a 70% chance of a second move before the end of the year. Interestingly, these odds shifted lower over the past week because prior to that the market was pricing in a 100% likelihood of two rate cuts before the end of the year. Part of this has to do with stronger inflation and consumer spending numbers but some economists feel that by easing aggressively the European Central Bank has reduced the pressure on the Fed to do the same. Whether that’s true remains to be seen but in the immediate future, how the dollar trades for the days and weeks ahead will be determined by the tone of Fed Chairman Powell’s press conference – due at 4.30am AEST on Thursday morning.
Locally, we get the RBA September board meeting minutes tomorrow, and August employment numbers on Thursday. Economists are expecting 15,000 jobs to have been created, keeping the unemployment rate at 5.2% for the fifth consecutive month.
© Copyright - EncoreFX, 2018.EncoreFX (Australia) Pty Ltd ABN 42 607 244 879 AFSL 479 870 is the issuer of the financial products in Australia. The information on this website has been prepared without taking into account your objectives, financial situation or needs and so before acquiring any financial services or products from EncoreFX, you should consider the appropriateness of the information having regard to your own objectives, financial situation or needs. You should obtain the product disclosure statement (PDS) for the relevant product and consider the PDS before making any decision to acquire the product. The information on this website is not directed at residents of any country other than Australia and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. It is the responsibility of visitors to this website to ascertain the terms of, and comply with, any local law or regulation to which they are subject.