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CAFX Market Update 16/08/2022

Welcome to our daily market update where we help keep you informed on the latest happenings in the world of FX and show you what this means for the Mighty Aussie Dollar.
If you have any questions or would like anything further explained, please don’t hesitate to reach out to your account manager or email info@cafx.com

Key Data Being Released Today

Australia                  – RBA Meeting Minutes
United Kingdom     – Unemployment Rate (Jun)
Eurozone                – Trade Balance (Jun)
ZEW Economic Sentiment (Aug)
United States         – Building Permits (Jul)
Industrial Production (MoM) (Jul)

Macro Report

Recession fears wrestled back control of sentiment both yesterday and overnight.  Chinese data released yesterday came in weaker than expected, setting the weaker tone.  Retail sales rose 2.7 per cent in the year to July (survey: +5 per cent). Industrial production rose by 3.8 per cent (survey: +4.6 per cent).  This had followed a surprise PBoC cut in 1yr MLF rate by 10bps to 2.75%, which itself was in the wake of weaker than expected July credit data snuck out late Friday evening.

Weak data continued in the US, with a plunge in the Empire (New York state) Manufacturing Survey, to -31.3 from 11.1.  The NAHB Homebuilders sentiment index also fell, to its weakest reading since the initial onset of COVID , falling a much bigger than expected 6 points to 49.

Oil also took a notable hit, with the demand fears and potential clear passage for an Iran nuclear deal that could see more supply come online.

The US dollar was bid throughout, whilst the AUD was one of the worst performers in the G10 currency group, having given up some of its recent gains.

Nonetheless, bucking the negative tone, US Equities managed to grind out gains with the S&500 up 0.4% and the NASDAQ a slightly bigger 0.6%.

Coming up today, the RBA Meeting Minutes will be released in our morning.  Overnight will see the European ZEW survey, US housing Starts and Canadian CPI.

AUD/USD Daily Chart

DXY (USD INDEX) Daily Chart

Major Global Markets 

Currencies Level Change (%)
AUD/USD 0.7016 -0.09
AUD/JPY 93.42 -0.21
AUD/CNH 4.7789 -0.15
Rates Yield (%) Change
US 10 Year #N/A #N/A
Aus 10 year 3.35 -0.02
Equities Level Change (%)
S&P 500 4297 0.40
NASDAQ 13128 0.62
ASX 200 7064 0.45
Commodities Level Change (%)
Iron Ore 132.5 1.20
Gold 1803.4 0.93
Brent Crude oil 96.45 -0.21