Macro Morning: Silent night

See the latest Australian dollar analysis here:

Australian dollar runs riot on BoJo win

A boring a night for stock investors with the US out and Europe a bit mixed.

The FTSE fell 0.16%, the DAX was up 0.47%, the CAC rose 0.18% while Milan and Madrid both slid 0.51%. The Italian elections are coming up fast so that might be a cause of market angst again soon depending on how Berlusconi’s resurgence seems to be heading.

Mario Draghi reinforced the message from the G20 meeting which is tough luck if the internal policies of the big developed economies weaken their currencies that’s just the way it is. Reuters reported this morning:

“Most of the exchange rate movements that we have seen were not explicitly targeted, they were the result of domestic macro economic policies meant to boost the economy,” Draghi said.

“In this sense, I find really excessive any language referring to currency wars,” he said, adding that the euro’s exchange rate was “around its long-term average.”

The G20 statement was not disappointing, he said.

“What I did say at the G20 in Moscow, I urged all parties to (exercise) very, very strong verbal discipline,” Draghi said.

Sterling is the latest market to attract the attention of the hedge funds and after a protracted period of a 1.52/1.63 range a break or at least a test of the low seems on the cards. Should that level give way then a 10 cent fall is on the cards. Elsewhere in FX land the Aussie is largely unchanged at 1.0291 having traded a range 1.0291 to 1.0315. Euro too is largely unchanged at 1.3351 having had a 50 point range while the USD seems to be breaking out against the Canadian dollar with a rise of 0.46% to 1.0108 and through that decisive median line on the chart we have been watching.

On commodity markets gold tried to rally but ended down slightly at 1609.50. Short term it still looks oversold but if we look at the US dollar’s performance we see that it is stronger against the euro recently, the pound, the Yen, Swissie and the Canadian dollar among others.

Lets have a look at some Meta 4 charts from my  AVATrade platform.

USD/JPY: 

The Yen remains under pressure and a move through the highs or down through 91.90 is needed to ignite a larger move:

AUD/USD:

The Aussie is under a little pressure from the stronger US dollar and looks biased back toward last week’s lows:

Data

RBA Booard meeting Minutes could be market moving this morning if they give insight into the timing of any cuts. The Japanese leading index is out this morning as well and then all eyes will turn to the German ZEW survey tonight which is expected to increase from 31.5 to 35.

Twitter: Greg McKenna

Here is how markets looked at the close this Morning

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