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ASX 200 Breaks Through 5000 Barrier

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Australia’s ASX 200 is on a tear today breaking through the key 5000 level. The ASX 200 is up 51.6 points to 5010.60. This is the highest level for the index since April 2010. Stocks are rising because of better than expected earnings and overall positive global economic sentiment. The Westpac/Melbourne Institute Consumer Sentiment Index came in at 108.3, much greater than expected and is the highest reading since the 4th quarter of 2010. Commonwealth Bank reported record first half profit and is leading the gains for Australian shares. CBA also increased its dividend to shareholders by 20 percent.

Aussie Dollar Rebounds On Consumer Sentiment Data

The Aussie dollar is higher today after the positive consumer sentiment data and technical buying. As JP Morgan said in its report yesterday, the 1.0225 level in the AUD/USD pair represented a technical support level that traders would buy. The low yesterday was 1.0227 and the AUD/USD pair is at 1.03392.

After the positive consumer sentiment reading, traders are reducing their bets that the RBA will cut interest rates at their next meeting. With the lessened chances of a rate cut in March, buying will likely come back into the Aussie dollar.

G-7 Rattle The Currency Markets Over Weakening Yen

G-7 policy makers offered sharply different opinions on the recent moves in the Japanese yen. The G-7 issued a statement that appeared at first to be an acceptance of the recent moves in the yen. An official then made contradictory statements signaling that the group was concerned about the recent weakness in the yen. The statements whipsawed the trading in the yen pairs on the mixed messages.

G-20 Meet This Week

The yen is strengthening against most major peers ahead of the G-20 meeting this week. The yen will likely be a major topic of conversation amongst the different leaders. Markets are leery of a currency war as most nations are looking to lower the value of their currencies to help their economies.

Bullish Calls On Oil

Several news items occurred yesterday making the bullish case for oil and an increase in prices. Ray Dalio’s Bridgewater Associates said that they’re bullish on the price of oil. They see economic recoveries in China and the US increasing demand and supply decreasing. The American Petroleum Institute (API) said in its weekly report that inventories fell 2.3 million barrels. OPEC released a report yesterday that said demand will be 100,000 barrels per day more than they expected. The US Department of Energy said in their Short-Term Energy Outlook that prices this year will be 3.7 percent higher than they forecast in January.

US benchmark West Texas Intermediate (WTI) is trading at $97.59, up 8 cents and Brent oil is trading at $117.68, down 7 cents. The US Department of Energy releases its weekly inventory report and that will have a direct impact on prices.

Metals Market Summary

Platinum continues to be the standout in the metals space after Zimbabwe seized mines belonging to the country’s biggest miner of platinum. Zimbabwe has the world’s second largest platinum reserves after South Africa. Platinum futures jumped on the news and are at $1725.70.

Palladium is trading at multi-month highs of $773.40. Palladium is used alongside platinum in autocatalysts.

In other metals markets, gold is at $1652.20, silver at $31.18, and copper at $3.74 a pound.

Economic Data Calendar

  • 0815 Swiss PPI (MoM) 0.3% forecast 0.1% prev (CHF)
  • 1000 Euro Industrial Production (MoM) 0.2% forecast -0.3% prev (EUR)
  • 1010 Italian 3-Year BTP Auction 1.85% prev (EUR)
  • 1030 British Inflation Report (GBP)
  • 1030 BOE Gov King Speaks (GBP)
  • 1100 Portuguese Unemployment Rate 15.80% prev (EUR)
  • 1330 US Core Retail Sales (MoM) 0.1% forecast 0.3% prev (USD)
  • 1330 US Retail Sales (MoM) 0.1% forecast 0.5% prev (USD)
  • 1330 US Import Price Index (MoM) 0.7% forecast -0.1% prev (USD)
  • 1500 US Business Inventories (MoM) 0.3% forecast 0.3% prev (USD)
  • 1530 US Crude Oil Inventories 2.350M forecast 2.623M prev (Crude Oil)
  • 1530 US Gasoline Inventories 0.267M forecast 1.738M prev (Crude Oil)
  • 1800 US 10-Year Note Auction 1.863% prev (USD)
  • 2130 New Zealand Business PMI 50.1 prev (NZD)
  • 2145 New Zealand FPI (MoM) -0.2% prev (NZD)
  • 2350 Japan GDP (QoQ) 0.1% forecast -0.9% prev (JPY)
  • 2350 Japan GDP Price Index (YoY) -0.5% forecast -0.8% prev (JPY)

As always good luck to all binary and forex traders and be sure to check back for the latest updates!