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Global Market Update
The View from Australia

by Craig Killaby | September 2, 2021



> AU July Trade Balance : 12.12Bio v. 10.10Bio exp.

> US Weekly Unemployment Claims : 340K v. 342K exp.

> US July Trade Balance : -70.1Bio v. -70.7Bio exp.

> US July Factory Orders : 0.4% v. 0.4% exp.


Overnight Headlines (BBG)

> US equity markets closed at yet another record as investors eye a very important employment report this evening

What you need to know

Momentum is building for positive risk sentiment in the lead up to this evening’s US employment report, with commodity backed currencies performing well in yesterday’s session. The AUDUSD has rebounded well in the aftermath of Jackson Hole, back up above the 0.7400 handle and posting a fresh high of 0.7409 ahead of the all important number. Optimism on the outlook for equity markets and positioning for a weaker USD as loose policy from the Fed seems to have taken hold, with the Dollar down another 0.3% overnight as comments from voting Fed members set the stage for a patient approach to policy in this month’s meeting.


In Australia, it seems as though PM Morrison is going to move ahead with the reopening of borders as vaccination rates hit key 70/80% levels, as it finally starts to set in that Australia is at major risk of being left behind as the world moves on to a COVID normal. Chinese equities moved higher during yesterday’s trading session, underpinning what has been a rebound week for China’s technology sector. Overnight in the US, unemployment claims came in right at market estimates and showed that despite the rise in Delta cases there is tightening occurring in the labour market. Equity markets are jumping all over the loose Fed, setting records yet again and the S&P500 closing up another 0.3%. Gold and Iron Ore the laggards in the commodities space with Iron Ore down 2.4% and Gold off 0.25%. WTI crude has continued to move higher, supporting the petrocurrencies as NOK and CAD outperformed with oil rising over 2% on the session.


The Day Ahead




> AU August AIG Construction Index : 48.7 prev.

> AU July Retail Sales : -1.9% exp.

> CN August Caixin Services PMI : 52.0 exp.

> US August Non-Farm Employment Change & Unemployment Rate : 720K & 5.2% exp.

> US August Average Hourly Earnings : 0.3% exp.

> US August Final Services PMI : 55.2 exp.

> US August ISM Services PMI : 61.9 exp.


Local retail figures and Chinese services PMIs will be the highlight in Asia today, however expect to see some positioning ahead of a very important US employment report at 10:30pm AEST this evening. Not expecting much movement in Asia unless markets see a huge surprise on the retail numbers to the upside, as negative data is clearly priced in. The US jobs report will likely have ramifications for all markets, with strong misses/beats having the biggest impacts in the Dollar. Would not be surprised to see a slight trickle lower for the Aussie as investors take profit on what has been a good week for the Pacific Peso.


Range Today : 0.7370 – 0.7430


AUD/USD Technicals


Clear bullish momentum for the pair as the test of key moving averages around the 0.7550 mark starts to become more likely. It will all hinge on this evening’s employment report from the US, with a solid miss likely sending the pair all the way to the 0.7480 level. Recent highs near 0.7430 will be the key today, with a break of the 55DMA seeing momentum build higher.

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