Standard & Poor’s Affirm Australia’s AAA Rating with a Stable Outlook.

The ratings agency S&P Global Ratings reaffirmed its AAA long-term sovereign credit rating and A-1+ short-term rating for Australia. S&P issued a note saying Australia should avoid a recession amid record low unemployment and elevated commodity prices, even as the economy slows this year amid higher interest rates. The RBA is expected to announce another 25 basis point increase in the official cash rate after its board meeting next Tuesday. S&P said Australia’s ratings were supported by “strong institutions, which … Continue reading “Standard & Poor’s Affirm Australia’s AAA Rating with a Stable Outlook.”

Forex Traders Weekly Outlook – Central Bank Meetings Dominate New Month

The US dollar continued its retreat this week, particularly against commodity currencies such as the Australian dollar (-2.0%), the Brazilian real (-1.9%), the Canadian dollar (-0.5%) and the New Zealand dollar (-0.3%). By week’s end we saw month end position squaring and eyes on next week’s big central bank decisions (Fed, ECB and BOE). This week the Bank of Canada raised rates as expected and the question is now how much of the next Central bank actions are built into … Continue reading “Forex Traders Weekly Outlook – Central Bank Meetings Dominate New Month”

Forex Traders Weekly Outlook – Risk on Flows Heading into Chinese New Year

Yen pairs dominated after the BoJ leaving monetary policy unchanged sparking a 300-pip rally in dollar yen which flowed across yen crosses. Japan’s CPI rose to 4% YoY, expect continued volatility as the BoJ Minutes and the Summary of Opinions are released into a less liquid Asian session next week. Both the NZD and AUD moved higher helped by “risk on” flows. Sticking with commodity currencies, The Bank of Canada will be in the spotlight when it updates with its … Continue reading “Forex Traders Weekly Outlook – Risk on Flows Heading into Chinese New Year”

Forex Traders Weekly Outlook – US Dollar Decline Continues Led by Yen Strength

The week can be summed up with markets are in the throes of a major short squeeze. One of the biggest shorts in 2022 were different currencies against the US dollar, most aggressively shorting the yen. We have seen these reverse abruptly and significantly, poorly positioned funds have experienced quick losses to bring in 2023. The yen has a two-week gain versus the dollar of 2.54%. These popular macro trades tend to be risk on or risk off and feed … Continue reading “Forex Traders Weekly Outlook – US Dollar Decline Continues Led by Yen Strength”

Australia Trade Surplus Widened in November to $13.2 billion With Iron Ore Exports Higher 7.9%

Australia posted a trade surplus of A$13.2 billion in November exceeding expectations for a surplus of A$10.5 billion following the A$12.217 billion surplus in October and $12.5 billion in September. The Australian Bureau of Statistics reported exports dipping 0.4 per cent and imports falling 1.5 per cent over the month. The report was amid softening global demand as China battled with a resurgence of coronavirus infections. Australia’s’ leading exports were Metal ores and minerals exports (iron ore) $14,502 billion up … Continue reading “Australia Trade Surplus Widened in November to $13.2 billion With Iron Ore Exports Higher 7.9%”

Australian Consumer Confidence Jumps as Household Inflation Expectations Eased

Weekly Consumer confidence climbed 4.9 points last week to 87.4, starting the new year with the first increase since 2018, ANZ-Roy Morgan consumer survey showed on Tuesday. Inflation expectations dropped from the end of 2022, falling 0.9% to 5%. Its moving average for the last four releases fell 0.3 percentage points to 5.7 per cent. Confidence is still well below the neutral level (100) and the long-run average of 111.7. Highlights Adelaide Timbrell, a senior economist at ANZ. Source: ANZ … Continue reading “Australian Consumer Confidence Jumps as Household Inflation Expectations Eased”

China’s Reopening to Add ~1% to Australian Growth Through Tourism and Education – JPM

Australia’s economy will get a big boost from the end to China’s zero-Covid policy over the next two years JPMorgan said in a note Saturday. JPMorgan’s chief investment strategist Tom Kennedy said “The largest potential upside from reopening itself sits within the services sector given China is the largest consumer of Australian tourism and education exports.” JPM sees a full recovery in Australia’s tourism adding 0.5% to its gross domestic product and the return of international students from China will … Continue reading “China’s Reopening to Add ~1% to Australian Growth Through Tourism and Education – JPM”

Forex Traders Weekly Outlook – US Dollar Topples with Yields After Soft US Data

The week can be summed up in forex by the ebbs and flows of Fridays market after the US December jobs report. There is a thought that the deluge of central bank rate hikes is nearing the end as the world topples into recession. The Treasury market had a flying start to the new year, highlighted by a 32 basis points decline in the 10-yr note yield to 3.56%. The 2s10s inversion widened to 71 basis points (from 54 basis … Continue reading “Forex Traders Weekly Outlook – US Dollar Topples with Yields After Soft US Data”

Forex Traders Weekly Outlook – Aussie Dollar, Yen, Won and Kiwi Strength at Year End

The US dollar continued its pullback to finish the year back at levels last seen in June. Perspective though, the U.S. Dollar Index declined 0.8% to 103.49, reducing 2022 gains to 8.2%. After beginning the year at 95.67, the Dollar Index almost hit 115 on September 28th at the height of anti-Truss hype with the UK bond market at the cusp of collapse. In the past weeks Treasury yields declined in the face of a surge in European yields which … Continue reading “Forex Traders Weekly Outlook – Aussie Dollar, Yen, Won and Kiwi Strength at Year End”

Resilient Australian Stock Market Outperformed in 2022, Supported by Mining and Energy Stocks

Australia’s blue-chip stock index, S&P/ASX 200 ended down 5.45% to 7,038.7 in 2022. On the last day of the trading year the ASX was up +0.3% and -0.9% for the week. This compares to 2021 being up over 13% for the year. Australian shares ended 2022 as one of the region’s more resilient markets with mining firms supporting as globally stocks were pummeled. The end to an era of low interest rates that made borrowing cheap and encouraged investors to … Continue reading “Resilient Australian Stock Market Outperformed in 2022, Supported by Mining and Energy Stocks”