Australia | Jun 06 2013
Economic News & Releases
Yesterday the Nikkei lost 3.83 % and in overnight futures was trading at one stage down 4.8% as highly leveraged Carry trade positions sought the exit at any price. Commodities fared extremely well in comparison and WTI crude made gains of 0.40% and copper was mostly flat. In currency markets big names continued to SELL the AUD/USD, trading down to 20 months low against the greenback every rally was sold into including a spike after US ADP employment data missed expectations coming in at 135k, 30k shy of estimate of 165k. Non-farm payroll numbers are highly anticipated but it appears the market has “GET OUT OF DODGE “ mentality on good or bad data as “Abenomics” and “Benankeprint”has lead to a high Yield bubble with all participants seeking the exits in a mass exodus and a very narrow doorway.
AUD/USD – Softer weaker GDP data and Carry trade unwind
Overnight the little Aussie battler was Crushed as big names from Europe sought the exits and sold on any rally in a classic risk of move as share markets around the world recorded heavy losses.
The AUD Dropped to a 20 month of .9511, taking out barrier options at .9525 with talk of massive stops at the next barrier around .9500 with some support at .9440 then .9350 . The Aussie has been stated as been 10 % overbought by the IMF , now after last night’s rout a 3 % figure has been touted .Heavy selling has started again this morning from the outset with Aussie trading at .9522 and has become the World’s Worst Currency and put in the developing nation basket.
A High Profile Sydney stockbroker was quoted Overnight in with Headlines “Australian dollar faces Grave Danger “and has been the most obvious Bubble in 2011 and 2012 and that the unwind will get “Very disorderly”.
USD/JPY – Back under 99 as Nikkei falls 18.4 % since May 25th
The Nikkei fell 3.8% on close yesterday paving way for sellers to further take the YEN below 100 against the greenback.
Further downside pressure is expected on resumption of trade as BOJ rhetoric has failed to inspire set growth targets within the economy. This is a very confusing situation with the true explanation hiding in the dark rooms in black box hedge funds and their carry trade positions.
XAU/USD – Supported by a Weaker USD index
Gold continues to find support on the back of weaker ADM employment data missing by 30k and a weaker greenback pushed Gold back over 1400. Non-farm Payrolls on Friday with estimate at 170k is the “man with the golden Gun“ and if the data misses could become the “goose that laid the golden egg “ as QE has failed to lift employment.
Next resistance is last week’s high at 1421 and support at last week’s low of 1372.
PhillipCapital Australia is live with its online FOREX trading platform Phillip FX365.
Please see our new website www.philliptrading.com.au for details and to open an account.
Reprinted with permission of the publisher. Content included in this article is not by association the view of FNArena (see our disclaimer).
This publication has been prepared solely for the information of the particular person to whom it was supplied by Phillip Capital Limited (“PhillipCapital”) AFSL 246827. This publication contains general securities advice in relation to Foreign Exchange (Forex or F/X) strategies. In preparing the advice, PhillipCapital has not taken into account the investment objectives, financial situation and particular needs of any particular person. Before making an investment decision on the basis of this advice, you need to consider, with or without the assistance of a securities adviser, whether the advice in this publication is appropriate in light of your particular investment needs, objectives and financial situation. PhillipCapital and its associates within the meaning of the Corporations Act may take an equal or opposite side to the trades referred to in this publication. PhillipCapital believes that the advice and information herein is accurate and reliable, but no warranties of accuracy, reliability or completeness are given (except insofar as liability under any statute cannot be excluded). No responsibility for any errors or omissions or any negligence is accepted by PhillipCapital or any of its directors, employees or agents. This publication must not be distributed to retail investors outside of Australia.