US stocks lower, Europe higher, AUD maintains strength, ASX futures down 10 points

Core US inflation was released as expected last night, at 1.7% year on year, 0.1% higher than the previous month's year-on-year figure. While headline inflation (includes food & energy) mimicked its previous month's growth (0.1% higher than expected), the market didn't focus too much on this measure and--considering US oil prices have dipped again since holding averages of around US$51-US$52 throughout February--may well disregard it given the continuing excess of oil being stored onshore in the US. The landscape for WTI crude prices is setting the price up for anything but a rebound, given the continuing production, shortfall in demand and upcoming maintenance season that may see a further shortage of storage capacity.

As such, there was no big response to the US CPI figures and the US dollar didn't move a lot last night. But watch this space, because traders love a good pull-back and as soon as the US dollar looks like its setting up to resume its bullish trend (and the euro its bearish trend) FX traders will flood the market with trades and we could see continued volatility in FX markets. Today's first chart shows the EURUSD currency pair sitting at US$1.091 after having hit lows of US$1.046 the week before last. There are no particularly easy set-ups for this trade given that the euro hasn't occupied these levels for well over a decade, but our technical analysts note that the US$1.10 level represents 50% Fibonacci resistance and, if that is broken, the next point of resistance would be the 50-day moving average (black line) that's presently sitting just under US$1.12.

The Australian dollar (AUDUSD, second chart) is trading above its current key support level at US$0.7850, while the ASX 200 has continued to track higher and is back sitting just under the 6,000 level after closing 13 points higher to 5,969 yesterday. Australia's ASX 200 futures are off 10 points but iron ore moved a couple of percent higher, gold & silver remain firm and copper has really broken out of the doldrums recently. The Asian Development Bank has come out and forecast 7.2% growth for China this year and 7% for next year in its latest annual outlook, which is at the top end of most assessments and this may offer some support for Asian stocks today.

Today‚Äôs charts are taken from the Rivkin Trader platform. 30,000 global instruments available to trade including FX, commodities, index, ETFs and international shares. Trade Australian share CFDs from just $8 or 0.10%. Click here or phone 1300 748 546 to open a Rivkin Trader account now.

Upcoming economic announcements: Australia's RBA will issue its financial stability review at 11:30am, US durable goods orders out at 11:30pm, all Sydney time.


This article was written by Scott Schuberg, CEO of Rivkin Securities Pty Ltd. Enquiries can be made via info@rivkin.com.au or by phoning +612 8302 3600.

comments powered by Disqus

DISCLAIMER: Rivkin aims to provide clear and simple information to those visiting our website. If any part of this disclaimer does not make sense, please phone Rivkin and ask to speak with a member of our Dealing and Relationship Management Team. Rivkin provides general advice and dealing services on securities, derivatives and superannuation (SMSF). Rivkin also provide SMSF administration and accounting services. Rivkin does not provide advice that takes into account your, or anybody else's, investment objectives, financial situation or needs. We strongly suggest that you consult an independent, licenced financial advisor before acting upon any information contained on this website. Investing in and trading securities (such as shares listed on the ASX) and/or derivatives (such as Contracts for Difference or 'CFDs') carry financial risks. CFDs carry with them various additional risks that differ from more simple securities such as fully-paid company shares. Some of these risks include not owning the underlying instrument from which a price is being derived, settling trades 'over the counter' with a financial institution rather than on a stock exchange, and using leverage to gain access to trades that may have a higher face value than your initial deposit. This risk of leverage means that it is possible to lose more than your initial investment. Our aim is to create more life choices for our clients, which means improving the wealth of clients throughout many market cycles by nurturing a relationship spanning many years. If you are not comfortable with your understanding of the risks involved before using a Rivkin product and service, please contact our office to seek further information or a Product Disclosure Statement, or make an appointment to sit with one of our friendly financial experts. It is in our interest for your Rivkin experience to be a rewarding and comfortable one. Rivkin is a trading name of Rivkin Securities ABN 87123290602, which holds Australian Financial Services Licence No. 332 802.