AUD has been an interesting currency over the past six months. Edging close to recession, the figures are up and down like a yo-yo.
The AUDUSD has been making lower highs and lower lows since the double top in March and is now at a level which has acted as support and resistance in the past. 0.7440 is the level to watch as we go into the trading week with the Aussie.
This week traders will be watching on Thursday 1st as the quarterly data for Private Capital Expenditure and monthly figures for Retail Sales are released. Pundits predict the first positive data for Private Capital Expenditure since February 2016 at 0.6% growth compared to last quarter’s -2.1% contraction. Retail Sales hasn’t seen growth since October 2016, but analysts are hopeful that this month will see a positive 0.3%. Traders will be thinking ahead to next week’s Trade Balance figures out on Thursday 8th for both Australia and its close trading partner, China.
Political events surrounding North Korea can cast a shadow across the Asian markets in general and their reach can affect AUD, so watch for any missive tests or other military action that may dampen enthusiasm for the currency.
USD market makers always pay close attention to the Non-Farm Employment Change. This month’s figures are due out on Friday 2nd June at 1.30pm GMT. Recent months have seen wild unpredictability with April’s rate plummeting from 235k to 98k against all expectations. May recovered to a better than expected 211k but it’s anybody’s guess what June will bring. As the job rate is so closely tied to the strength of the economy – people tend to spend less when they don’t have jobs – and the data is released very soon after the month ends, traders rely on it to plan their currency strategy.
Closely tied to job creation is the change in Average Hourly Earnings and this looks set to drop from 0.3% to 0.2% indicating a slowing economy but the Unemployment Rate seems to be staying the same at 4.4% if pundits predictions are correct.
Weirdly, just about the main pressure on the dollar is the POTUS twitter account so keep that feed running in the background. No matter what the facts on the ground are, his missives can change things ‘bigly.’
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OPEC is in the driving seat for oil prices this week as the 14 countries controlling around 40% of the world’s oil supply have their union meeting on Thursday 25th. Journalists and traders will be paying close attention to those countries’ leading politicians and oil company execs all week hoping for an insight into what will happen.
Analysts say last year’s decision to cut supply looks likely to be extended but there is speculation that Nigeria and Libya could rock the boat. Both countries are embroiled in geopolitical conflicts whose resolution or continuance directly influences the volume of oil supply. Nigeria, in particular, seems to be steadying and resuming production, which will make for interesting talks at the end of the week. The question is whether or not the recovering economy is going to be subject to the same restrictions as the other OPEC members.
Setting the tone for the meeting will be the Crude Oil Inventories data released at 3.30pm on Wednesday 24th. North American oil companies are set to be some of the biggest beneficiaries of any price drop as they’re not tied to OPEC’s decisions. But too much of a glut could dampen prices. The number of barrels has dropped week on week since 5th April. Is this the week that turns around?
As the Euro continues to rally against the dollar, traders are achieving rates not seen since mid-March. But what’s powering this renaissance?
Today’s Eurogroup meetings in Brussels are closed to the press, but tidbits released by officials chatting to journalists can reveal new initiatives and decisions that may affect the currency of the 19-country shared currency group. Smart players will watch for press releases across the day.
A positive German IFO Business Climate survey is forecast tomorrow (9am GMT) adding momentum to the upswing while Draghi’s speech to the first Bank of Spain’s Conference for Financial Stability at 1.45pm GMT on Wednesday 24th is highly anticipated to boost the currency further.
Trump visiting Italy and Brussels on the European leg of his first world tour as POTUS will set trading hearts racing as the world waits to hear who will win the next round of World Leader Challenge. And they might want to hear about any trade deals and that kind of thing too.
Bitcoin, the cyber currency, surged over the weekend prompting fears of a bubble. But when the world’s largest hack asks for payment in the non-traceable currency, people are going to sit up and take notice.
Last week hackers exploited a longstanding Windows vulnerability to hold more than 200,000 victims in over 150 countries to ransom by taking control of their computers and databases. While it sounds like the plot of a 1980s sci-fi, the reality hit home as operations were canceled, life-saving cancer treatments suspended and the turmoil hasn’t ended. As the world woke up on Monday and computers were turned on, more infections took hold.
In the old days, ransoms were paid in gold because it held its value and was untraceable. Bitcoin can officially be called the new gold now. It is a go-to safe haven when markets are in turmoil and it’s now the currency of choice for international criminals. The question is now what governments and international organisations intend to do about it, and how that will affect its value.
Last month’s surprise employment figures were good news for AUD. Showing an increase of 60k as opposed to the expected 20k it marked fantastic turnaround for the wobbly economy which saw a decline of -6.4k in March. While the unemployment rate stayed the same at 5.9% if employment continues to rise when this month’s figures come in on Thursday 18th, many expect traders to look more favourably on the Australian economy.
Market makers are likely to have this in mind when they peruse the Monetary Policy Meeting Minutes on Tuesday at 2.30am GMT though close trading links with China mean their Industrial Production news on Monday at 3am GMT is another key factor.
And don’t forget the special relationship developing between Turnbull and Trump “I love Australia” as the phone slamming first contact is resigned to the bin of fake news.
BTCUSD has been setting record highs of late and is currently trading at over $1800. What has been driving the demand for Bitcoin recently? Here are some reasons for Bitcoins dramatic rise and some interesting trading levels as we go into the next trading week.
Japan Legalises Bitcoin
Japan legalized the cryptocurrency as a payment method recently and this has led to a greater amount of bitcoin being bought with yen, which is helping to support the price. This led to Japan’s bitcoin trading volumes overtaking that of the U.S. and China.
Russia Moves To Legitimise The Cryptocurrency
Russia, one of the strongest opponents of bitcoin is seeking to regulate the digital currency. The authorities there hope to recognize bitcoin and other cryptocurrencies in 2018 as they seek to enforce rules against illegal transfers
A second chance of the SEC approving the Bitcoin ETF
The Winklevoss brothers proposed an exchange-traded fund (ETF), which would have allowed large institutional investors to gain exposure to Bitcoin. The Securities and Exchange Commission (SEC) rejected the application but this application is again under review. A ETF would give further credability to Bitcoin and attract institutional investors into Bitcoin.
Global geopolitical and financial risk.
Its a mad world and Bitcoin behaves a bit like gold when things get risky: it attracts buyers! With the potential slowdown of China, Brexit, Trump and the geopolitical risk of North Korea; its no wonder that investors are looking to allocate their money in alternative markets which they think might be safe if things get a little edgy!
This week BTCUSD has made all time highs of over $1890. Will BTC hit $2000? The chart above shows some interesting possible demand levels for Bitcoin against the USD dollar.
What do the demand levels look like for BTC against the Japanese Yen given the recent news from Japan? Bitcoin has rallied against the Japanese yen, touching the ¥217,000 level. Pullbacks continue to offer buying opportunities, and there may be a bit of psychological support near the ¥200,000 level.
Saudi spokesman, Khalid Al-Fahil, made a strong statement during OPEC discussions in Kuala Lumpur on Monday. OPEC cuts look likely to extend across the year and possibly into 2018 as he said “the market is moving towards rebalancing.” Well, the other side of that balance is the increased output of the USA.
However, Crude Oil Inventories have fallen week on week since this time last month suggesting things aren’t so cut and dried. Plus the growing importance of China and India as oil consumers means projections show the US will shrink as a proportion of the oil market over the next 25 years.
But for now the US markets remain the biggest factor in the price so check out Crude Oil Inventories on Wednesday at 3pm GMT to see if the stockpile is increasing or declining. Also the PPI at 1pm on Thursday 11th to see if US manufacturers forecast growth.
And keep an eye across the GBPUSD as the Brits gear up for their election. Expect plenty of bravado announcements on immigration and Brexit negotiations that could send waves through both EUR and GBP indexes this week.
Macron made history as he swept into power as France’s newest President in Sunday’s election and, around the world, market analysts and traders breathed a sigh of relief. Here is one European country that hasn’t lost its collective reason. Euro-centric markets have rallied but the win was predicted so most gains have already been priced in. Business-friendly Macron is widely predicted to keep a market economy at the centre of his policy strengthening Europe as a global centre of trade.
Draghi’s speech on Wednesday 10th at 1pm GMT about the impact of monetary policy is more likely to move EUR markets. And keep an eye across the Channel as the Brits gear up for their election. Expect plenty of bravado announcements on immigration and Brexit negotiations that could send waves through both EUR and GBP indexes this week.