Global Themes


Aussie jumps – then falls – as uncertainty drives markets

The AUDUSD had yet another wild day of trading with early gains in yesterday’s trade quickly evaporating overnight.

The Aussie continues to see large prices swings on the back of central bank uncertainty that has recently driven markets.

Yesterday’s Reserve Bank of New Zealand decision signalled the RBNZ was less concerned about the NZ economy than many had expected and this initially drove a big move higher in the AUD.

However, the gains later reversed as the US dollar staged another solid move higher.

USD comeback

This similar theme of uncertainty is seen in the US dollar with inflation reported broadly in line in expectations overnight.

The report signals a Fed rate hike isn’t off the table.

The move had a big impact in precious metals and AUD was hit.

The Aussie's biggest losses were versus the NZD with the AUDNZD falling 1.0% to near two-year lows.

Chinese trade, EU GDP

The focus remains on the global growth story with Chinese trade and German growth both due today.

The benchmark Baltic dry shipping index, which measures demand for large container ships and is seen as a proxy for global economic growth, is down at three-year lows in a sign of a big drop in trade.

German growth will be carefully watched after a negative report last quarter. A second-consecutive negative quarter will result in a technical definition of a recession for the Eurozone's largest economy.

Chinese trade is expected around 1.00pm AEDT with German growth at 6.00pm. EU-wide growth is due at 9.00pm.

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