To the scoreboard:
Dow: 21,830.31 +33.76 (+0.15%)
S&P 500: 2,472.10 -3.32 (-0.13%)
AUD/USD: 0.7987 +0.0001 (+0.01%)
ASX200 SPI futures (Sept contracts): 5,658 (+24)
Iron ore benchmark 62% fines: $US68.73 (-2.1%)
1. USD can’t find a buyer: The market’s focus on Friday night turned to the preliminary print for Q2 GDP growth in the US which came in at 2.6%. The result matched forecasts and was an improvement from the Q1 slowdown, but it wasn’t enough to turn around the current bearish sentiment towards the US dollar. The greenback once again fell against the major currencies, with the euro back over $US1.17 to its highest level since January 2015.
2. Aussie steady ahead of a big week: More USD weakness saw the Aussie push higher on Friday night, but it hasn’t broken back through US80 cents in early trade this morning. Traders will likely stay cautious today ahead of key RBA announcements this week, starting with interest rates tomorrow and the quarterly Statement on Monetary Policy (SoMP) on Friday. Business Insider’s weekly calendar has the details on a big week of data to start the month.
3. Dow hits another new record: Buy there were some jitters on the tech-focused NASDAQ, which eased off recent record highs as it posted two straight days of losses to close the week. European markets felt the effect of a stronger euro, with the composite Euro STOXX600 index down by more than 1%. ASX futures traders are confident that the local index will rally today following Friday’s heavy sell-off.
4. Commodities wrap: Spot prices for iron ore fell on Friday, but futures are pointing higher ahead of Chinese manufacturing data to be released latter day. Benchmark crude oil climbed again on Friday to close at $US52.52 a barrel, capping a huge 9.3% weekly gain after a big draw in US inventory. Gold continues to be supported by the weak US dollar and is now trading at $US1,270 an ounce.
5. If you think USD weakness is here to stay: It may pay to keep an eye on the bond market. Right now the yield spread between US and German 2-year bonds is at a decade high, and John Authers from the Financial Times notes that over time, currencies follow the direction of interest rates. It suggests the market is placing more focus on short-term developments like political gridlock in the US, but Authers argues that if the US Federal Reserve continues to normalise policy in front of other central banks, that should support the USD in the years ahead.
6. Bets on Bitcoin: Tomorrow marks a major day on the Bitcoin calendar, when the development community behind it will either opt to adopt the new SegWit2 operating platform, or the currency will split. As for almost anything there’s a betting market available. Punters have placed their bets on whether Bitcoin prices will go up or down, with most predicting a fall in value.