Daily Roundup – Markets review 06/03/2019


Daily Roundup – Markets review

March 6th

The Aussie Dollar may have been largely unmoved against the greenback in the wake of yesterday’s upbeat US economic data, but positive sentiment soured during the Asian session. A dovish statement from the RBA chief where he said he struggled to see interest rates rising this year, combined with a meaningful miss in the Q4 GDP print which showed growth of just 0.2%, left AUD/USD to slip once again. The pair is now trading at levels not seen since the recovery of January’s flash crash and given the mounting inflationary threat that’s emerging in the US right now, even at these levels there’s an argument to say the Aussie could be counted as overvalued.

Euro weakness continues to build, again with yesterday’s US data releases driving EUR/USD down to levels not seen in almost two weeks. Anticipation ahead of tomorrow’s ECB meeting continues to build although it remains difficult to see how anything Mario Draghi says will be interpreted as positive for the Euro. Either stimulus measures are introduced or the Eurozone slowdown is brushed under the carpet, with both scenarios seemingly unlikely to provide cause to prop up the common currency.

Sterling weakness continues to build, as a result of both lacklustre UK economic readings and the ongoing uncertainty over Brexit. The two are indelibly linked, but with some kind of progress over Brexit still at least a week away and business confidence for investing in the UK now dwindling rapidly, there’s a good chance that the downside pressure will prevail for some time yet. Even yesterday’s far better than expected services PMI number was insufficient to provide any lasting upside, with the market rounding on falling employment in the dominant sector instead.

ADP payrolls ahead of the US open may provide some trading opportunities. A strong print here will reiterate fears over demand in the US jobs market and how this could filter through into inflationary pressures, bidding the dollar higher ahead of Friday’s non farm payrolls and hourly wages data.


There’s a descending triangle in play for AUD/NZD which is close to testing the 1.0350 level which has repeatedly provided support in recent years. A break below here opens up the way for a return to two and a half year lows around 1.0250