Weaker commodity prices and a stronger US dollar has the Australian dollar pinned to the mat. The trading towards ten-year lows comes at a crucial time for the Reserve Bank of Australia as it meets today.
Expectations for an interest rate cut in Australia are muted after the back-to-back cuts in June and July. However the inventory component of the national accounts shocked with a 0.9% drop in the second quarter. This has some analysts predicting a negative number when GDP data is released tomorrow, a development that could shift the RBA’s thinking. However the stimulatory impact of the lower Aussie should be enough to stay the board’s hand today.
European stocks lifted overnight in the absence of US trading. Official news sources in China signalled preparation for an extended trade engagement with hints the World Trade Organisation may be asked to adjudicate. US futures are once again under pressure in thin out of hours trading despite the White House’s insistence that trade talks are on track. Markets in Shanghai and Shenzhen ignored the downdraft yesterday. A repeat performance today could lift the region.
Disclaimer: CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.
