September 9, 2019

Market Outlook

Equities markets were relatively unchanged on Friday and the US Non-farm payroll numbers disappointed resulting in the Aussie dollar trading at one-month highs versus the Greenback. Political uncertainty has increased for the UK with Tory MPs resigning over the weekend.

Week Ahead

Key economic releases from across the globe this week include: Australia: Home Loans, Business and Consumer Confidence ; US: inflation rate, retail sales, Michigan’s consumer sentiment and JOLTs job openings; UK: monthly GDP, trade balance and unemployment; Eurozone: the European Central Bank (ECB) will probably unveil its stimulus package on Thursday, Germany Trade Balance and Eurogroup Meetings; Rest of the World: Chinese foreign trade and inflation.


The Aussie dollar is higher this morning against most of its major counterparts. AUD/EUR is at a six-week high and AUD/USD is at the highest level since August 1st, 2019. The recent highs versus both the Euro and the US dollar are not due to AUD strength but rather Euro weakness as the ECB prepares for an interest rate cut and a re-opening of its money printing program. US jobs numbers disappointed on Friday printing only 130K versus a market expectation of 163K. As a result of the weak numbers the US dollar was sold with the Aussie dollar capitalizing on this and brushing aside soft retail sales and GDP numbers printed earlier in the week. Data this week locally is light with business confidence and consumer sentiment figures out Tuesday and Wednesday respectively.


The US dollar ‘s dominance came to a halt on Friday as non-farm payroll figures disappointed.  Dollar selling had stalled prior to the release of the Friday figure but continued when the numbers printed. A 25 basis-point cut in interest rates by the Federal Reserve when they meet 19th Sept is fully priced in for its September policy meeting and the probability of a 50-basis-point cut has increased from 0% to 30%. The recent jobs data suggests that jobs are settling at lower levels but still remain at respectable levels.


Over the weekend ex-work and pensions secretary Amber Rudd quit Boris Johnson’s cabinet. Rudd was very outspoken on the governments approach to Brexit stating that the government has “no formal negotiations” with the EU about a new deal and that any conversations had are just that, conversations. Amber Rudd stated that the Mr. Johnson’s decision to expel 21 MPs from the parliamentary Conservative party an “act of political vandalism”, after her former colleagues rebelled last week over a bill designed to avoid a no-deal Brexit. The Pound has remained resolute amidst political uncertainty and should continue to do so up until the possibility of a general election being called. It now looks as though legislation will be pushed through Parliament preventing the UK leaving the EU without a deal in place. This has held GBP firm but the way ahead for the Pound is still very uncertain.


Aussie-Euro starts the week at a six-week high with the European Central Bank (ECB) expected to cut interest rates and potentially re-start a money printing exercise which was last seen in 2017. Key data out of Europe this week includes German Trade Balance and European Industrial Production. However, the spotlight will be firmly on the ECB come this Thursday with releases in the form of ECB’s refinancing rate, monetary policy statement and post-policy press conference.

Rest of the World

Japan’s Q2 growth was revised down to 0.3%. The NIKKEI 225 increased to 5-week highs along with their current account reading pushing to the largest level in 4 months. New Zealand’s Manufacturing Sales fell 0.4% year-on-year in Q2 and Chinese Imports have dropped 5.6% from the previous year. Canada has reported that business moral is currently at a 10-month high with the Ivey PMI showing an increase to 60.6 for the month of August from a previous reading of 54.2.

Event Wrap


AUD – Home Loans

JPY – Current Account

JPY – Final GDP

EUR – German Trade Balance


GBP – Manufacturing Production

GBP – Industrial Production


AUD – NAB Business Confidence



USD – Consumer Credit

GBP – Average Earnings Index

GBP – Claimant Count

GBP – Unemployment Rate

CAD – Housing Starts

CAD – Building Permits


NZD – Visitor Arrivals

AUD – Westpac Consumer Sentiment

CNY – Foreign Direct Investment



AUD – MI Inflation Expectation


USD – Unemployment Claims

USD – Crude Oil Inventories

EUR – Industrial Production

EUR – Refinancing Rate

EUR – Monetary Policy Statement

EUR – ECB Press Conference


NZD – Business NZ Manufacturing Index

CNY – Bank Holiday

USD – Crude Oil Inventories

USD – Retail Sales

USD – Preliminary Consumer Sentiment

USD – Federal Budget Balance

EUR – Trade Balance

EUR – Eurogroup Meetings



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