Global equities mixed, commodities lower, AUDUSD looking weaker, ASX futures down 34 points

Crude oil was the biggest mover on Friday night, as short-term buying on the back of supply concerns relating to fighting in Yemen subsided. (For those not up to speed on Yemen, it is alleged that Iran is backing Shi'ite Houthi rebels, who successfully managed to force Yemen's President Abd-Rabbu Mansour Hadi to resign earlier this year and just last week flee to Saudi Arabia as the Saudis began air strikes against the Houthis. Hadi is a Sunni Muslim and the Saudis are rallying Sunni leaders from the Middle East to pitch in and fight, which many observers are reporting as a proxy war between Iran and Saudi Arabia, being fought on Yemeni ground.) After rallying for seven straight sessions, you can see on today's chart that WTI crude (OILUS for Rivkin Trader clients) reversed a chunk of its gains on Friday. As discussed in Friday's morning market wrap, there are plenty of reasons to remain bearish crude oil, especially in the United States. Plenty of sellers used the top of this recent range to exit positions and short-sellers will likely now attempt to chase WTI crude back down to US$45.

Today's second chart shows the AUDUSD currency pair, which is looking a little vulnerable in the short term, given it's now chipping away at the lower level of its buying support level of US$0.7740. The first two columns of red in today's Global Markets matrix at the bottom of today's wrap will give an insight into why the Aussie has been under pressure over the last 24 trading hours; commodity markets were broadly weaker on Friday night and this pointed the AUDUSD, NZDUSD and CADUSD all in the same direction - downward.

Irrespective of what side of the political fence you sit on, or your love or dislike for certain leaders, NSW Premier Mike Baird's win wasn't just a win for himself and his state Liberal Party, it was also a big win for Prime Minister Tony Abbott and his leadership - this will be a stabilising factor within Australia's Federal government and will probably be seen as pro-business given the privatisation mandate that was won with regard to long-term NSW electricity infrastructure and operation leases. Infrastructure assets are hot property in a low-interest rate environment like ours, and if at least some of these assets are sold to foreign investors (which is likely), it should have the effect of allowing Abbott to get back on the "open for business" message without fear of the political risk that would have come from seeing Baird get punished for this privatisation move.

Today‚Äôs charts are taken from the Rivkin Trader platform. 30,000 global instruments available to trade including FX, commodities, index, ETFs and international shares. Trade Australian share CFDs from just $8 or 0.10%. Click here or phone 1300 748 546 to open a Rivkin Trader account now.

Upcoming economic announcements: Japanese industrial production out at 10:50am, all Sydney time.


This article was written by Scott Schuberg, CEO of Rivkin Securities Pty Ltd. Enquiries can be made via info@rivkin.com.au or by phoning +612 8302 3600.

comments powered by Disqus

DISCLAIMER: Rivkin aims to provide clear and simple information to those visiting our website. If any part of this disclaimer does not make sense, please phone Rivkin and ask to speak with a member of our Dealing and Relationship Management Team. Rivkin provides general advice, securities and derivatives dealing services and accounting administration services. Rivkin does not provide advice that takes into account your, or anybody else's, investment objectives, financial situation or needs. We strongly suggest that you consult an independent, licenced financial advisor before acting upon any information contained on this website. Investing in and trading securities (such as shares listed on the ASX) and/or derivatives (such as Contracts for Difference or 'CFDs') carry financial risks. CFDs carry with them various additional risks that differ from more simple securities such as fully-paid company shares. Some of these risks include not owning the underlying instrument from which a price is being derived, settling trades 'over the counter' with a financial institution rather than on a stock exchange, and using leverage to gain access to trades that may have a higher face value than your initial deposit. This risk of leverage means that it is possible to lose more than your initial investment. Our aim is to create more life choices for our clients, which means improving the wealth of clients throughout many market cycles by nurturing a relationship spanning many years. If you are not comfortable with your understanding of the risks involved before using a Rivkin product and service, please contact our office to seek further information or a Product Disclosure Statement, or make an appointment to sit with one of our friendly financial experts. It is in our interest for your Rivkin experience to be a rewarding and comfortable one. Rivkin is a trading name of Rivkin Securities ABN 87123290602, which holds Australian Financial Services Licence No. 332 802.