Australian Dollar has soared above 75 US cents buoyed by increase in commodity prices ahead of the widely expected rate cut next month. In fact, the fact that the dollar has gained in value almost points to a need for a correction of the inflation target set by the RBA. We have been flagging this issue for quite some time as it is now pretty clear that inflation will print at the low end of the current target of between 2% - 3%. In fact, we expect inflation print for the June quarter to come in at 0.4% q/q which off course points to a rate cut.
Iron Ore prices have gained almost 50% from the levels in mid-December 2015 and is rising steadily. The ASX 200 have now got past the fears of Brexit. The ASX 200 barring from the jitters of Brexit has been climbing steadily from the levels of 4,600 in mid-February this year to over 5,400, a rise of over 15%. There have been calls for a TPA with UK now that with Brexit, the EU restrictions from the UK perspective for trading with Australia separately is likely to end. Unemployment is low and business confidence is likely to be better now that the general election results point to the ruling Liberal-National coalition likely to govern in its own right for the next three years. Support for AUD is therefore on the rise.
Iron Ore prices have gained almost 50% from the levels in mid-December 2015 and is rising steadily. The ASX 200 have now got past the fears of Brexit. The ASX 200 barring from the jitters of Brexit has been climbing steadily from the levels of 4,600 in mid-February this year to over 5,400, a rise of over 15%. There have been calls for a TPA with UK now that with Brexit, the EU restrictions from the UK perspective for trading with Australia separately is likely to end. Unemployment is low and business confidence is likely to be better now that the general election results point to the ruling Liberal-National coalition likely to govern in its own right for the next three years. Support for AUD is therefore on the rise.
MARKET DATA
| Australia Cash rate Australia 90 day bank bill Australia 10 y bond US 10y Govt bond AUD/USD AUD/EUR AUD/JPY AUD/CNY ASX 200 S&P 500 Dow Jones Industrial Average Shanghai Composite Brent Oil (USD per BBL) Gold Spot (USD per oz) *Iron Ore 60% MBIOI-IR index USD/t (Updated Wednesday)" | As at 15-Jul 1.75 1.96 2.00 1.55 0.7626 0.6858 80.58 5.0973 5,443 2,161 18,516 3,054 47.60 1,332 49.78* | As at 8-Jul 1.75 1.97 1.88 1.37 0.7488 0.6755 75.17 5.0072 5317 2129 18146 2988 46.42 1366 48.61* |
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