Markets Await Budget Release

All eyes will be on the release of the Australian Federal Budget later tonight where markets will be watching to see how the ratings agencies will view it. Moody’s has already stated its wariness of the budget and it will certainly be scrutinising the details closely to see whether Australia deserves maintaining its AAA credit rating. Any drop in Australia’s rating would almost certainly cause bond yield to rise and increase the cost of funding the national debt. This could potentially also lead to higher borrowing costs for the banks which they would pass on to consumers. Australia’s retail sales data for the month of March will be released today with expectations of a 0.3% increase. This would represent a significant turnaround from February’s decline of 0.1%. The retail environment in Australia continues to remain challenging and retailers will certainly be looking at the retail sales numbers for signs of a resumption of consumer spending activity.

Globally, although the US stock markets were virtually flat last night, they continue to hover near their all-time highs. The Dow Jones has been sitting right around the 21,000 level for a couple of weeks now and seems to be having trouble decisively breaking through. Confidence surrounding president Trump’s tax cut plan appears to be supporting markets at this time.  

The gold price continues to have a fairly severe pull-back from recent highs as the probability of a US rate hike in June is now a near certainty (according to market pricing). This probability was bolstered by the strong jobs report released late last week and by comments from Yellen and other officials suggesting a hike is on the cards. Interestingly, the first estimate of the first quarter GDP was just 0.7% making the March rate hike one of the weakest quarters in 30 years in which the Federal Reserve raised rates. The Fed is confident that the first quarter was just an anomaly and growth will return in the second quarter.        

If you’re interested in trading global markets and still need practice, click here to open a free $100,000 Rivkin Trader account. 

Data releases:

·        Australian Retail Sales (MoM Mar) 11:30am AEDT

·        Australian Annual Budget Release 07:30pm AEDT

To view the Rivkin economic calendar and Local Markets matrix, members can click here.

This article was written by William O'Loughlin - Local Investment Analyst, Rivkin Securities Pty Ltd. Enquiries can be made via or by phoning +612 8302 3633.

Complex product warning

This article contains information about foreign exchange contracts, which are considered complex financial products. Please click here to read ASIC's foreign exchange trading article before considering an investment in foreign exchange contracts. 

This article contains information about CFDs, which are considered complex financial products. Please click here to read ASIC's "Thinking of trading contracts for difference?" document before considering an investment in CFDs.
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 and dealing services on securities, derivatives and superannuation (SMSF). Rivkin also provide SMSF administration and accounting 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.