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Currently on a global basis, inflation is running at 2% - in the US it’s currently at 2.5%.
The cost of oil and associated gasoline products are underlying contributors to the inflation rate, with oil falling below the key $50bl level overnight for the first time since 7 December 2016. This inflation figure looks to be in check for now.
USD strength has again waned overnight, with the dollar basket easing back to 101.88. At the same time, the commodities complex also moved to consolidate some recent falls. There seems to be a risk of sentiment moving through the markets, as traders wait to see the change in the non-farm payrolls due at 12.30am AEDT. The forecasted figure is an additional 200K; any number above this may spur the markets to move higher. This is a sign showing us that President Trump has put the US economy on a path of exponential growth.
The EUR/USD moved back over 1.06. It has clearly found support in the past two-weeks above the 1.05 level. This is a sign of strength and that the parity party for the euro may be on hold for now.
Gold stocks may see some support today. Even though the gold price fell to a low of $1201 overnight, down nearly 5% over the past 10 trading sessions, the AUD price still remains above the key $1600oz level. This may be short lived, as the gold price resumes its primary down trend from the July 2016 highs of $1375.
Three Australian banks (ANZ, NAB, WBC) are pushing over recent 60-day highs, with CBA recently ex-dividend close by.
The Australian 10Y shows a yield of 2.91% and remains in breakout territory, another potential rate cut from the Reserve Bank of Australia (RBA) seems at odds with the forward curve. A resurgence in the S&P coming into the close and the Aussie SPI futures have now turned positive by 10 points; this could bring in a surprisingly positive day.