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Global Market Update
The View from Australia

Craig Killaby September 10, 2019



> AU August NAB Business Confidence : 1 v. 4 prev.

> CN August CPI & PPI : 2.8% & -0.8% v. 2.6% & -0.9% exp.

> CA August Housing Starts & Building Permits : 227K & 3.0% v. 213K & 2.1% exp.


Overnight Headlines (BBG)


>  A cross-party group is seeking a way out of the Brexit “nightmare” by working together to find a deal that can secure a majority in Parliament, suggesting a Northern Ireland-only  backstop may be one answer


What you need to know


The Aussie opens up this morning largely unchanged from yesterday, as the quiet trading week continues in local markets. Yesterday saw some negative NAB business confidence data slightly halt the Aussie’s rally, although Chinese inflation data that was a touch better than expected and stabilised the pair. There was not a whole lot to report across markets, with the biggest news coming from a firing/resignation of one of US President Trump’s key national security advisors amidst hard disagreements. In Europe, UK PM Boris Johnson commented that they are working hard on a Brexit deal, but stated that it is not a must in order to leave the EU. The general feel across markets is a clear move away from safe havens, with USDJPY hitting a fresh high and UST yields rising to the highest levels in a month. If the US/China trade talks that are slated to kick off at the start of October go well, there could be a significant risk rally to close out 2019.


The Day Ahead




> AU September Westpac Consumer Sentiment : 3.6% Prev.

> US August PPI & Core PPI : 0.0% & 0.2% exp.

> US EIA Crude Oil Inventories : -2.9M exp.


Very little on the economic calendar today, with tier 3 WBC consumer sentiment numbers and US PPI the highlights. The risks will start to pick up tomorrow where US inflation and the ECB meeting will be the major events. If there is going to be movement, it is likely to come tomorrow night. Tight range expected today, with the AUD looking to continue to march ahead with 0.6900 in its sights.


Range for the day : 0.6830 – 0.6890


AUD/USD Technicals


There will need to be a break of the 55DMA (0.6874) in order for the bullish momentum to keep building. The 100 DMA at 0.6909 is capping upside for the time being, although higher lows will bring optimism. Support now seen above the 0.6800 handle, with the lows of 0.6764 and 0.6677 hold up the pair.

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