The ASX reversed most of yesterday's bumper gains after the dollar plunged and the mood on global markets turned temporarily bearish.
At 1pm EST the ASX 200 was 56 points or 1% weaker at 5720 as investors dumped gold stocks -3.9%, metals & mining -2% and energy -1.4% following a rally in the US dollar on the expectation that the rate-hike cycle in the US is about to accelerate. The Australian dollar sagged almost 1.5% overnight after one of the most "dovish" members of the US Federal Reserve said the US economy was at "an inflection point". The Aussie was lately buying 75.6 US cents.
"The talk of the FX markets... has been the sell-off in AUD/USD, and at 1.5% the sell-off is the biggest since November 9," IG's Chris Weston told Fairfax.
Wall Street suffered its heaviest loss since January, sending the S&P 500 down 0.59% just a day after the index's best session of the year. Dow futures were recently off 19 points or 0.1%. China's Shanghai Composite declined 0.57%, Hong Kong's Hang Seng 0.76% and Japan's Nikkei 0.23%.
Crude oil futures bounced 14 cents or 0.27% this morning to US$52.67 a barrel. Gold futures rallied 70 cents or 0.06% to US$1,233.60 an ounce.
Are we seeing the return of volatility? As a day trader, I'd like to think so. Easier to make money intraday when things are moving, albeit trickier for overnight holds. Conditions have been benign for so long that it may come as a shock to some traders when we hit turbulence. Have to adapt your strategies quickly or head to the sidelines. Trading: straightforward morning with pips from AYR and AGO. First dab at DW8.
