6 things Australian traders will be talking about this morning

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Good morning.

To the scoreboard:

Dow: 22,331.35 +63.01 (+0.28%)
S&P 500: 2,503.87 +3.64 (+0.15%)
AUD/USD: 0.7958 -0.0001 (-0.01%)
ASX200 SPI futures (Sept contracts): 5,727 (+7)
Iron ore benchmark 62% fines: $US71.76/t (-1.2%)

1. Aussie goes off the boil: The AUD slipped back below US80 cents overnight as iron ore prices dipped again, while base metals have fallen from recent highs. Today’s release of the Reserve Bank’s minutes from its September interest rates meeting (11:30am AEST) could be interesting for the Aussie. There’s also weekly ANZ consumer confidence data at 9:30am AEST, and the ABS has its house price index for the June quarter at 11:30am AEST.

2. Markets drive ahead: Although markets are setting up for the US Fed’s interest rate decision tomorrow night, the prevailing risk-on theme from last week — with stocks rising, bond being sold-off and money moving out of safe-haven currencies — continued on Monday. The US dollar climbed by another 0.6% against the Japanese yen to its highest level since July, benchmark US 10-year treasuries edged higher again and the S&P500 closed at yet another record high. Futures traders are betting on another rise in Aussie stocks today.

3. Trump trade back in effect? One contributing factor to the recent market moves could be that investors are finally starting to place some faith in Donald Trump. This post from Joe Ciolli has more, including the below chart which shows how some of the recent moves in US stocks has been driven by the government’s push to get pro-growth tax reform back on the agenda:

4. Central banks drive currency moves: The UK pound eased back from last week’s high after Bank of England governor Mark Carney clarified that the pace of any rate hikes would be slow and steady in his speech last night. The Canadian dollar dipped for a similar reason, following more cautious comments from Bank of Canada deputy governor Timonthy Lane.

5. Iron ore on the slide: Spot prices for benchmark 62% fines dipped again overnight, and prices have now fallen by around 6% over the past week. With markets in risk-on mode and the US dollar gaining some ground after appearing to have found its recent floor, gold has been steadily falling back towards $US1,300 an ounce since closing at its recent high of $US1,349 on September 7.

6. Bitcoin rallies back: Despite the move by Chinese authorities to ban cryptocurrency exchanges, Bitcoin has stayed resilient. It had a sharp rally back above $US4,000 (from below $US3,000), and gains extended to other major cryptocurrencies as well — here’s the price action from earlier this morning:

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