Thanks Oscar and morning crew.
Half-time round-up:
The share market looks set for its biggest setback in nearly a month after a surging US dollar pressured commodity prices and mining stocks.
At 1pm EST the ASX 200 was 59 points or 1.1% weaker at 5457 and on track for its sharpest decline since a 75-point plunge on August 3. The market retreated as investors bet that US rates may rise as early as next month, sending ripples through dollar-denominated commodities, following hawkish comments by US Federal Reserve Vice-Chairman Stanley Fischer after a speech by Chair Janet Yellen on Friday.
The US dollar index was last up 0.8%. US crude oil futures slumped 59 cents or 1.24% this morning to US$47.05 a barrel. Gold futures fell $6.30 or 0.38% to US$1,319.60 an ounce. The Australian dollar was buying 75.43 US cents.
“Friday’s gain in the dollar, driven by Fed Reserve leaders, is expected to be sustained this week,” Jason Wong, currency strategist at Bank of New Zealand, told Bloomberg. “With most other central banks clearly in the mood to ease, the Fed may still be cautious in its approach to guard against the negative effects of the dollar strength on the global economy.”
Gold stocks bore the brunt of the sell-off in Australia, sending the sector down 4.3%. Also weak were energy -1.9% consumer staples -1.5% and metals & mining -1.5%. At +0.4%, telecoms was the only sector to withstand the downswing.
While Japan's export-dependent Nikkei surged 2.21% on a weaker yen, China's Shanghai Composite eased 0.05% and Hong Kong's Hang Seng 0.38%. Dow futures were recently off nine points or 0.05%.
Big move in the greenback this morning and plenty of room to move higher if the market decides the Fed is getting serious about rate hikes. US dollar has pretty much range traded for a year and a half and is well short of the upper band. Negative implications for commodities. Trading: hoped for more from XPE, but locked in profits when it got the wobbles. Best thing about selling is I can stop reading the thread - see how much you can stand before developing a profound sense of despair for our species. VTG is swinging nicely intraday right now and gave a risk-free entry below $4. Also took GSC. Commiserations to holders of MCS - hope Burnett got out okay?
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