General Market Analysis 07/06/23

Markets Tread Water Ahead of Data

Global financial markets took a bit of a breather yesterday with the majority of the major stock indices all having relatively quiet days, in the US the major indices all closed slightly higher on the day, the Dow up 0.03%, the S&P up 0.24% and the Nasdaq up 0.36%. The main highlights of the day had been the second consecutive surprise rate hike from the RBA and news in the US that the SEC is continuing to target crypto companies, this time with Coinbase up on charges. In general, the dollar gained on the day against most of the majors with the Aussie being the standout exception after the RBA decision.

Buy Aussie Wear Diamonds!

The RBA once again came through with a surprise rate hike yesterday and the Aussie took center stage for currency traders in what was a relatively quiet day otherwise. The reserve bank reinforced its commitment to stemming inflation and warned of further hikes and this saw the Aussie dollar become the currency of choice for the day. It surged over 1% against the dollar but the crosses are where the real value could be, it’s up over 3% on the month against the Yen and 2.5% against the Euro and Sterling. The key taken from yesterday’s meeting was that there could be more hikes on the way and this message was reiterated by Governor Lowe this morning when he spoke at a summit. This should attract flows on the buy side as traders look to take advantage of the longer-term interest rate differentials.

Another Day, Another Central Bank

Markets experienced a relatively quiet day yesterday and investors will be looking to the event calendar for some fresh impetus as the trading day progresses. The Asian market will once again look first to Australia with the release of the latest GDP numbers this morning, the expectation is for a 0.3% increase for the quarter-on-quarter data. Chinese Trade numbers are also due out today and investors will be hoping for some positive indicators from that sector. The European session is once again fairly light on data releases, but the focus will once again move to Canada on the New York open with the Bank of Canada’s latest rate announcement.