AUD

• Oil jolt. Another jump in oil prices weighed on sentiment. Equities lower, USD firmer. NZD weaker. AUD underperforms after its strong run.• Twists & turns. Markets pricing a supply risk premium in oil. More volatility likely. RBA next week with chances of a rate hike now sitting at ~70%. Global Trends Middle East developments continue to be in the driver’s seat. Sentiment remained negative overnight with the jump in oil prices dampening the market mood. Brent crude oil is back above ~US$101/brl, a ~8.5% lift from where it was tracking yesterday, and ~74% above levels it was at in...

• Oil swings. Pull-back in oil prices has supported risk sentiment. Will it last? Situation in Middle East remains fluid. More volatility likely over period ahead.• RBA Hawks. AUD/USD at top of its range. RBA Dep. Gov ‘hawkish’ yesterday. Will it move next week? More than 2 hikes now priced in by September. Global Trends After a torrid end to last week and negative start on Monday sentiment has improved over the past few days. Volatility has continued with the situation in the Middle East still tricky to navigate. However, while there are still underlying issues in place traders (as...

• Macro worries. Growth/inflation concerns due to the jump in oil were compounded by a weak US jobs report. AUD remains on the backfoot.• Oil risks. Production cuts across Middle East creating supply risks. Oil at multi-year high. USD has become positively correlated to oil the past few years. Global Trends It was a negative end to a rather torrid week for markets on Friday. Developments in the Middle East and oil prices remain front of mind, while a weaker than anticipated US jobs report and tepid retail sales compounded investor nervousness. Oil prices jumped again with Brent Crude tracking...

• Oil jump. Another move higher in oil prices because of Middle East concerns dampened risk sentiment. Equities fell. USD firmer. AUD underperforms.• Macro worries. Higher energy prices pose an upside risk to inflation & downside risk to growth. More bouts of market & AUD volatility likely. Global Trends Market volatility related to developments in the Middle East and swings in the oil price continued overnight. This time sentiment soured once again with the US/Israel strikes on Iran showing little sign of easing after several days of conflict. Indeed, the conflict appears to be widening across the region with more...

• Market swings. Middle East conflict generated a burst of volatility overnight. Equities declined, oil prices rose. AUD traded in a ~2.5% range yesterday.• Macro news. AU Q4 GDP today. RBA Gov. Bullock noted the March meeting is “live”. China PMIs also due. US ISM services & ADP employment out tonight. Global Trends The broadening conflict in the Middle East and concerns that it could drag on longer than the “4 to 5 weeks” touted by President Trump rattled market nerves overnight. Risk sentiment soured as ‘stagflation’ worries took hold given the prospect of a simultaneous slowdown in growth and...