Collinsonfx Daily Market Commentary

US equity markets rebounded strongly after two consecutive days of losses. Bloomberg reported that the 'Phase One' US/China trade agreement was close to being completed and this dispelled President Trump's calls for the agreement to be postponed until after the November US Presidential election. President Trump is content to reap the massive bonus of tariffs while negotiations are extended. This is more than likely pressure being applied to China, during negotiations, to get the deal done. The rebound in equities was despite some weaker US economic data. The ADP Jobs report, showed a smaller than expected increase in private sector jobs, while Weekly Mortgage Applications contracted by 9.2%. The EUR was steady trading around 1.1070, supported by steady EU PMI data, while the GBP approaches 1.3100.

Australian GDP came in at 1.7% annual GDP growth, confirming recent weakness, but remaining resilient and positive. The RBA has recognised the weaker economic activity and labour markets, but have emphasised the monetary and fiscal stimulus that will flow through into stronger economic growth in the coming year. The AUD crept up to 0.6850, while the NZD pushed above 0.6500, supported by stronger commodity prices. Markets will focus on US jobs reports, to close out the week, while the RBNZ releases a report on Capital Reviews. The elephant in the room remains the US/China trade war