The winners and losers
As mentioned, it was all about the banks last week, which carried local stocks to their 10-year highs, even amidst growing trade war risks. Having given up ground recently, due to a series of regulatory disasters, the CBA was the leader in the bank’s recovery, bouncing off its ~$64 lows to presently trade just shy of $74 per share. Big hitters Rio Tinto and BHP Billiton look like early winners today, rallying in the New York session 2.2% and 1.4% respectively after OPEC+’s agreement to boost oil production, boding well for the other miners on the ASX. On the other side of the coin, one can’t go past Telstra as the biggest laggard last week, which shed almost 5% in value on Tuesday. The losses came following an announcement from the company that it will undergo a massive restructure (which includes the loss of 8,000 jobs), along with a downgrade of profit forecasts from approximately $10bn to around $8bn.
The little Aussie battler
The AUD managed to recover ground late in last week’s trade, after being dumped to 12-month lows following US President Trump’s threats of increased tariffs on a further $US200bn worth of Chinese imports. The AUD/USD traded as low as ~0.7345 in the middle of the week, opening-up several fragile levels of support in the process. The dive was arrested and reversed late Friday night (AEST), solely by virtue of a pullback from the exhausted US Dollar. The dynamic benefited the EUR, with the AUD/EUR taking a spill towards the 0.6350 level, having held above 0.6400 for a couple of weeks. The best measure of the AUD’s position at the moment is the AUD/JPY, which seems to be more accurately reflecting global risk, with the pair trading at around 81.75 at time of writing.