Markets a little lower last night, AUD a touch firmer, ASX futures up 2 points

Although European equity markets are still shaking from the Volkswagen (VOW3, today's first chart) fallout and US equities are trying to find their feet over sloppy guidance from their central bank, Australia's ASX looks set to start trade this morning flat after putting in a +73 point rally yesterday. The Australian dollar (AUDUSD, last chart) has found its feet above the 70c level this morning despite the US Federal Reserve correcting the expectations put out after last week's rate decision. Fed Chair Janet Yellen used a speaking opportunity at the University of Massachusetts to give out far more accurate guidance than all of the Federal Open Market Committee members and Fed officials have put together over the last week, "Most FOMC participants, including myself, currently anticipate that achieving these conditions will likely entail an initial increase in the federal funds rate later this year, followed by a gradual pace of tightening thereafter." So a 2015 hike is on! (And I think the market would prefer that, given the weight of commentary opposed to the 'do nothing' stance.)

No central bankers really should look to the US as an example for setting monetary policy expectations - after putting up with month and months of disparate views on whether there will be a 2015 rate rise, opinions and messages out of the Federal Reserve have whipsawed over the past week and all they're doing is adding to investor uncertainty unnecessarily. And after all of that, one speech at a university answers the question the market wanted to know all this time. Bizarre.

In today's second chart I've once gain plotted the 5,000 point support level on the ASX 200. We lifted from that point yesterday and have a clean start today, so it'll be up to the prevailing mood across Asia today to dictate whether we can push higher. Rivkin's Global Investment Director gives his technical view on the ASX 200, S&P 500 and AUDUSD every morning to Rivkin Global clients. If you're not a Rivkin Global client but you'd like to receive a bullish, bearish or neutral short-term view on the direction of the ASX 200, S&P 500 or AUDUSD, please get in touch by emailing customerservice@rivkin.com.au and a Rivkin Relationship Manager will shoot you the analysis once it has been published.


Source: Rivkin, Saxo Bank

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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.

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