Market News & Analysis

Australian shares set to rise while USD strengthens

Feb 12, 2019 | Market Update

Upcoming high impact economic news:

11:30 AUD ABS Home Loans
11:30 AUD NAB Business Confidence
19:20 EURO German Buba President Weidmann Speaks
00:00 GBP Bank of England Gov Carney Speaks
04:45 USD US Fed Chair Powell Speaks

EQUITIES

Australia

Australian shares are poised to open Tuesday’s session higher despite a mixed session on Wall Street overnight. The SPI Futures is indicating a 24-point rise at the open as reporting season continues to sway investors. Challenger, Cochlear and Transurban will be the next major players to unveil their first half financial results. Yesterday, Bendigo-Adelaide Bank posted a fall in cash profit while retailer JB Hi-Fi beat expectations.

U.S.

In the United States, the Dow Jones fell 53 points while the S&P 500 closed flat, up less than 2 points. The Nasdaq rose 9 points or 0.13%. It comes as the U.S. approaches the end of its own earnings season and looks towards trade negotiations with China later this week. The Trump administration remains positive a deal will be inked between the two nations before the March deadline, despite Trump and the Chinese President not arranging a meeting.

Europe

The London FTSE finished on a positive note, closing 57 points higher, along with European equities. The CAC 40 rose 52 points, the DAX 30 jumped 107 points while the Euro Stoxx 50 closed 29 points higher. It follows positive news out of Italy overnight, after a Eurogroup meeting revealed Italian banks had higher capital positions than required by the ECB.

CURRENCIES

Uncertainty over the trade talks between the U.S. and China helped boost the USD against the majors. The USD rose 25 pips against the Australian dollar while the USD/CAD pair closed the session at 1.330. Against the Yen, the USD rose more than 60 pips to close at 110.34. The GBP/USD pair fell almost 70 pips and the USD/CHF closed higher too. 

The AUD/USD pair is now at its lowest level since January 3, where the AUD closed at 70.04 US cents. There’s a chance the AUD could recoup some its losses if local data proves positive with the latest round of home loans and business confidence data out at 11:30 AEDT.

The GBP will be on focus tonight ahead of a speech by Bank of England Governor Mark Carney, while U.S. traders will be focusing on a speech by Federal Reserve Chairman Jerome Powell.

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