AUSTRALIA: AUD Consolidating Renewed Weakness, NAB Adjust RBA Forecast
- AUDUSD sits marginally weaker on Thursday, broadly consolidating a powerful move lower this week, with losses of 1.39% since last Friday’s close following a notable hold of 50-day EMA resistance. Spot was assisted south by a lower-than-expected set of Q4 Australia inflation data on Wednesday, which alongside a more stable greenback have provided key headwinds for the pair.
- Bolstering the bearish trend, NAB brought forward its RBA rate cut forecast to February overnight, bringing all four Australian major banks now in line, while the OIS market is pricing in a 92% chance of a 25bps cut.
- A continuation lower for AUDUSD, would bring the focus back on 0.6131, the Jan 13 low and the bear trigger. Below here, attention would be on 0.6045, the 1.5 projection of the Sep 30 - Nov 6 - 7 price swing.
- In the crosses, AUDNZD is trading back towards the lower bound of the past 4 months, printing a 1.1006 low overnight. Standard Chartered have recommended going short, and they target 1.0788 with a stop at 1.1103, citing diverging central bank policies and highlighting the RBNZ has likely peaked in dovishness. Additionally, AUDJPY broke the prior January low overnight and the next area of interest will be at 95.52.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
BONDS: A wide trading range for Gilt
- A wide 40 ticks trading range for the Gilt contract, lower liquidity has helped exacerbate some of two way move, initially sold off on the Open, but has recovered towards its intraday high ahead of the Early close during the early Morning session.
- UK markets will be closing at 12.15GMT ahead of the New Year, and the timing for the closing Window in Gilt should be at 12:13-12:15 (GMT).
- Technically, the first resistance is seen further out, up 93.09, but market moves will likely stay limited with most Desks on the sidelines.
- US Treasuries and Tnotes have stayed within the Overnight ranges, just a 6 ticks range for TYH5 so far today.
- Immediate resistance for the US 10yr Bond futures is still at 109.08+, only managed a 109.06 high today.
COMMODITIES: WTI Futures Holding Higher
WTI futures are trading higher today as the contract extends recent gains. A stronger reversal to the upside would refocus attention on key short-term resistance at $76.41, the Oct 8 high. Initial firm resistance is unchanged at $71.97. A bear threat in Gold remains present. The yellow metal traded sharply lower on Dec 18 and the move undermines a recent bull theme. A resumption of weakness would open key support at $2536.9, the Nov 14 low.
- WTI Crude up $0.4 or +0.56% at $71.41
- Natural Gas down $0.14 or -3.51% at $3.799
- Gold spot up $8.09 or +0.31% at $2614.49
- Copper down $3.3 or -0.81% at $405.95
- Silver up $0.01 or +0.05% at $28.961
- Platinum up $8.16 or +0.9% at $912.55
EQUITIES: Bear Threat in E-mini S&P Remains Present
A bear threat in the S&P E-Minis contract remains present and the latest move down highlights the end of the recent Dec 20 - 26 corrective bounce. An extension lower would expose 5866.00, the Dec 20 low and a key short-term support. A bull cycle in the Eurostoxx 50 futures contract remains intact, however, the recent move down highlights a corrective phase. Despite the latest bounce, a short-term bear threat remains present - for now.
- In China the SHANGHAI closed lower by 55.563 pts or -1.63% at 3351.763 and the HANG SENG ended 18.53 pts higher or +0.09% at 20059.95.
- Dow Jones mini up 56 pts or +0.13% at 42977, S&P 500 mini up 17.75 pts or +0.3% at 5976.25, NASDAQ mini up 87.75 pts or +0.41% at 21503.25.
