Australian GDP data released earlier today showed disappointing economic growth of only 0.4% over the past quarter.
- Australia released its quarterly GDP data which showed growth of only 0.4% while the consensus forecast was meaningfully higher at 0.7%. This might have strengthened the case for rate cuts, but inflation is already overshooting to the point that rate cuts are practically impossible, putting the Reserve Bank of Australia in a difficult position. The data does not seem to have obviously affected the Australian Dollar, with the US Dollar declining today and driving price action as markets expect an 89% chance of a rate cut next week by the US Federal Reserve of 0.25%.
- Today will see the release of the ADP Non-Farm Employment Change estimation, which suggests almost zero net new jobs were created. There is a lot of speculation that the US economy has really slowed down, so if the actual number is much higher than expected, that might move the US stock market and even the US Dollar.
- Precious metals, especially Silver, remain in focus. Silver made another record high earlier, coming very close to touching $59 per ounce at one stage. Trend and momentum traders will still be interested in being long here, but as it is a breakout on high volatility, there is much doubt that it can go much higher. Traders might want to be long with an unusually small position size. I am long with a little under half of my normal volatility-based position.
- Bitcoin is looking significantly stronger as it rises to a new 2-week high above $90,000. Bitcoin's underperformance recently compared to other risky assets seemed significant. However, there are initial signs of life coming back to the crypto market.
- Stock markets are edging higher, with the broad S&P 500 Index currently trading higher at 6,846 which is in sight of the record high above 6,900. It is still a bull market, and it is December in a year of gains, which suggests we are likely to see a "Santa Claus" rally and higher prices, possibly even new all-time highs.
- The Forex market has been very quiet over today's Asian session. The USD/JPY currency pair is falling again and trading well below ¥156.00. Trend traders will still be long of this currency pair, although they will remain vulnerable over the short-term to potential intervention from the Bank of Japan or Japanese Government which does not want to see the Yen depreciate much further. The USD/MXN currency pair is testing very long-term lows. Many Forex brokers pay positive swap on short positions, which could make this an attractive carry trade.
- Swiss inflation data (CPI) released earlier today showed a quarterly contraction of 0.2%, showing the Swissie is actually continuing in a deflationary state, which should be positive for the Franc.
- There will be a release of US ISM Services PMI data later today, which is expected to show quarterly growth of 0.7%.
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