To the scoreboard:
Dow: 21,674.51 -76.22 (-0.35%)
S&P 500: 2,425.55 -4.46 (-0.18%)
AUD/USD: 0.7928 -0.0003 (-0.04%)
ASX200 SPI futures (Sept contracts): 5,703 (-4)
Iron ore benchmark 62% fines $US75.41/t (+3.3%)
1. Markets take a breather: Capital flows moved back out of safe haven assets on Friday, with traders keeping a close eye on developments in Washington. Given the recent political turmoil, markets appeared to breathe a sigh of relief that Trump adviser Steve Bannon had quit and that National Economic Council chair Gary Cohn wouldn’t be resigning. US stocks edged up but closed lower after Thursday’s steep fall, with retailer Footlocker crashing by 28%.
2. Aussie dollar climbs back above US79 cents: The US dollar lost ground across the board to end the week, and the AUD had a strong session along with other commodity bloc currencies as oil prices shot up and iron ore also rose. The Aussie is holding steady above US79 cents in early trade this morning, with no major data releases scheduled on the domestic calendar this week.
3. Can it stay there? That will likely depend on whether recent support for the US dollar will prove temporary, or instead form the base for a stronger USD in the second half of the year. The outlook is mixed, with a recent improvement in second-tier US data points (but still low inflation) offset against geo-political risk and concern about the postponement of US president Trump’s pro-growth agenda.
4. Aussie stocks stay within range: The ASX200 managed to limit its fall to 0.5% on Friday coming off a heavy night of selling in global markets. So the local market finished up around 1% for the week with earnings season in full swing, and remains comfortably within its recent trading range. Earnings this week will be highlighted by BHP which reports on Tuesday afteroon.
5. Commodities wrap: Gold found more buyers in a risk-off environment on Friday night, briefly eclipsing $US1,300 for the first time since November last year before falling back slightly. Spot prices for iron ore roared ahead to their highest level since April 6, and benchmark crude also shot up by almost 4% to close at $US52.87 following a recent string of US inventory draw-downs.
6. Crypto-mania is alive and well: Following the split of the Bitcoin currency on August 1, offshoot Bitcoin Cash traded in a narrow range while the version on the original blockchain surged over $US4,000. But the tables appeared to turn over the weekend, with Bitcoin Cash — which trades on a blockchain that allows for higher transaction speeds — more than doubling in value. A short time ago it was trading at $US735.