a week ago
Snapshot of major markets and macro summary
On Saturday, news broke that France, the United States, and Britain conducted “precision strikes” on Syria. The heightening of new geopolitical developments may cloud the data releases from the week ahead that included RBA minutes, Federal Reserve speakers, Bank of Canada’s Rate announcement, and a heavy Chinese economic calendar that includes GDP, industrial production, retail sales and fixed asset data. The difficulty for markets tends not to be pricing risk, but rather not knowing when risk needs to be priced as geopolitical concerns put traders and investors at the whim of various headlines, and not the economic calendar where we’re more comfortable.
S&P/ASX ends week higher, set for uncertainty on Monday: The headline Australian stock index finished the week higher at 5829.10, good for a gain of +0.7% over the course of the week. Receding concerns over a US military strike in Syria proved to be a positive driver for global equities, but the catalyst appears to be short-lived: the US, UK, and France carried out airstrikes against Damascus early-Saturday morning in Syria. Now, with the prospect of geopolitical tensions ratcheting higher between the US and Russia, volatility in global financial markets seems likely to reappear and drag down the S&P/ASX at the start of the week.
AUD/USD posts a strong week, eyes local data: The Australian Dollar posted a lofty gain of +1.15% versus the US Dollar, its first weekly gain since the week of March 5. Much of the gains were due to a general improvement in risk sentiment, with both the S&P/ASX and Wall Street indices trading higher last week. But with the prospect for the downside to emerge after the US, UK, and France launched military strikes against Syria over the week, the Australian Dollar may be dragged down as investors shift to a more cautious mood. Local data should draw focus as well, with the RBA meeting minutes due out on Tuesday and the March employment report due out on Thursday. Expectations call for a gain of +20K jobs and for the unemployment rate to drop from 5.6% to 5.5%, which may prove to be a buoy for the Australian Dollar in more turbulent conditions emanating from abroad.
Get more from IG
"As last trading week came to a close in North America, there remained a question as to whether risk positions should be held over the weekend."
Trader thoughts - the long and short of it - by IG Analyst, Monday 16 April 2018 08:31
Upcoming Webinars: Here is a list of the proposed schedule for today, please click on the link below to book your place.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary