Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the financial markets:
Main Trading Event Of The Day: U.S. Fed Chair Yellen Speaks @ 15.00 GMT
WHAT WE’RE WATCHING TODAY
Yellen Prepares To Address On Financial Stability
Federal Reserve Chairwoman Janet Yellen is preparing to discuss financial stability later today as market-watchers worry that the Fed’s exit from its easy monetary policy stance will may upset the markets. Yellen speaks today at the International Monetary Fund’s first annual central banking lecture and will then joins discussions with IMF current managing director Christine Lagarde. Stock markets have been range-bound with low volatility. Further concern has been targeted toward parts of the bond market, particularly on the corporate side. In her recent press conference, Yellen said that financial stability concerns are always on the table for policy makers but are not impacting on monetary policy in any major way at the moment. She stressed several times that the outlook was uncertain as some observers noted that Yellen’s focus on uncertainty was a message to buoyant financial markets that a little caution might be welcome. Fed officials are aware that ignoring risks to financial stability has its perils but focusing too much on it does as well. Fed Chair Yellen Speaks Today @ 13.00 GMT.
WTI Trades Near Three-Week Low
West Texas Intermediate traded close to the lowest price in three weeks before stockpile data that may signal the strength of fuel demand in the U.S. Futures were little changed in New York after declining 3 cents yesterday. U.S. crude inventories likely fell last week while gasoline supplies rose before data from the Energy Information Administration today. Fighting in Iraq has not yet spread to the south, home to more than three-quarters of its oil production so the markets are closely monitoring the political situation. WTI for August delivery was at $105.35 a barrel in electronic trading on the New York Mercantile Exchange, up 1 cent, at 2:52 p.m. Sydney time. The contract slid to $105.34 yesterday, the lowest close since June 11. The volume of all futures traded was about 54 percent below the 100-day average. Prices have gained 7 percent this year. Brent was steady in London and was 3 cents higher at $112.32 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $6.94 to WTI, compared with $6.95 yesterday.
Aussie Dollar On A Roll, But Will It Last?
The Australian dollar soared to eight-month highs this week, seemingly on a roll but questions are being raised as to whether it will last. The AUD has been on an upward trend since late January and has gained approx 6.5 percent against the U.S. dollar so far this year, making it the best performing major currency after the New Zealand dollar. Its strong performance, driven by a rise in risk appetite and firm demand for Australian bonds, has led some currency analysts to believe that parity with the U.S. dollar could be achieved by year-end. Yet others believe that its recent performance should not be taken as a sign that a move to the one-to-one level with the U.S. dollar is likely to come sooner rather than later. The Aussie dollar rose as high as $0.9504 on Tuesday after the Reserve Bank of Australia left interest rates unchanged and delivered as statement that was viewed as less dovish than anticipated. Data on Wednesday showed Australia’s May trade deficit at A$1.9 billion, compared with analyst expectations for a deficit of A$120 million. Recent data also shows consumer confidence in Australia has taken a hit from the May budget. The concern, according to economists, is that the fall in confidence will spill over into weaker retail sales and makes the economic outlook uncertain.
That sums up today’s highlights! Please keep checking into our Facebook, Twitter, Google+ and LinkedIn pages for all the latest daily trading news. We hope you have a profitable day on the markets.
