Good morning and happy Friday.
To the scoreboard:
Dow: 22,359.23 -53.36 (-0.24%)
S&P 500: 2,500.60 -7.64 (-0.30%)
AUD/USD: 0.7933 +0.0099 (-1.23%)
ASX200 SPI futures (December contracts): 5,661 (+19)
Iron ore benchmark 62% fines: $US66.09/t (-5.1%)
1. AUD takes a bath: The Aussie dollar fell by more than 1% overnight as commodity prices got smashed. The 5% drop in iron ore was the biggest one-day fall since May. More on that here. The sell-off continued across base metals with copper down 1%, and even heavier falls in zinc and nickel. Here’s the move in the Aussie:
2. USD also retreats: Gains in the US dollar were short lived, following the US Fed’s relatively upbeat policy announcement yesterday. The market is seemingly still unconvinced about the Fed’s growth projections for the US economy, and the US dollar index eased back by 0.3% after yesterday’s gains, with the euro back above $US1.19.
3. US stocks finally fall: The S&P500 dipped overnight after edging higher for four straight days, with tech stocks leading the falls. But traders still think the rally in US financial stocks has a way to run, after the US Fed stuck to its forecast for continued rate increases. There was no such luck for Aussie banks yesterday in a shocking session for Aussie stocks, although futures traders are predicting a bounce today despite headwinds for the big miners.
4. Cryptos get rocked: Last night was a downhill run on the cryptocurrency rollercoaster, as Bitcoin dipped by 5% while its off-shoot Bitcoin Cash is almost 10% lower. While China is going ahead with plans to ban cryptocurrency exchanges, Bitcoin enthusiasts have found a way to work around the ban. Meanwhile, a trader in the US has been accused of running a Bitcoin ponzi scheme.
5. Bears beware: Blackstone vice chairman Byron Wein says he’s not concerned about a fall in the US economy anytime soon — at least not until 2019. Although US stocks have been hitting new record highs, Wein said earnings growth will underpin steady growth in the near-term.
6. Gold dips again: Gold fell another 0.8%, and is now back below $US1,300 an ounce for the first time since late August, after reaching a 13-month high above $US1,350 in mid-September. Oil continues to edge higher as the global supply picture continues to tighten, and closed at a 5-month high above $US56 a barrel.
Enjoy your weekend, I’m on Twitter @Mr_SamJacobs.