Good morning and happy Friday.
To the scoreboard:
Dow: 21,948.10 +55.67 (+0.25%)
S&P 500: 2,471.55 +13.96 (+0.57%)
AUD/USD: 0.7949 +0.0003 (+0.04%)
ASX200 SPI futures (Sept contracts): 5,693 (+5)
Iron ore benchmark 62% fines $US78.91/t (+3.7%)
1. Buck reverses course: The US dollar index’s two-day rally came to an end after a 2% climb. Among the major currencies, the Canadian loonie rose sharply in the wake of a strong Q2 GDP report. The euro is back above $US1.19 after preliminary inflation data beat expectations, although a Reuters report said that the recent strength in the euro may slow the pace of the ECB’s monetary stimulus withdrawal.
2. Aussie remains buoyant: The AUD benefited from broad US dollar weakness overnight, with more of a risk-off tone in global markets while commodity prices pushed higher. The Aussie also made another sharp move higher against the Kiwi dollar. Here’s the AUD’s rise against the Kiwi during August:
3. Data deluge: August PMI data starts with the Ai Group’s manufacturing PMIs for Australia at 9:30am AEST. There’s also non-government Caixin PMIs for China, after yesterday’s official figures were steady. Later tonight there’s Markit manufacturing PMIs across the US, UK and Europe which will add insight to the global growth picture. The US economy has a big day ahead to end the week, with retails sales and the monthly employment report due later tonight. Find a full preview here.
4. It’s the end of the month, so that means: Another rally for iron ore, which has developed a pattern of spiking at the end of each month after the release of the latest PMI data. Benchmark 62% fines rose by almost 4% and are back threatening to break through $US80/t. It was a solid session for commodities, with benchmark crude oil rising by almost 3% in the wake of production shutdowns from Hurricane Harvey.
5. Global stocks rise: In a sense it was business as usual in overnight markets, as 2017’s main themes of US dollar – selling, bond buying and demand for equities all prevailed. US, UK and European stocks all rose with the S&P500 now just below its recent record highs. Global stocks capped off August with their 10th straight month of gains. Unfortunately the Australian market hasn’t joined the party, with the ASX200 flat for the year and futures traders have the local index little changed ahead of this morning’s session.
6. Place your bets for Bitcoin $US5,000: The cryptocurrency is trading at a new record high this morning above $US4,740. It’s climbed by more than 60% since the split with Bitcoin Cash on August 1. If you’re interested in cryptocurrency technicals, Goldman Sachs strategists are forecasting a rise to $US4,827 before a correction.
Enjoy your weekend, I’m on Twitter @Mr_SamJacobs.