​EBC Markets Briefing | Aussie dollar strong; oil prices slumped

The Australian dollar jumped on Wednesday as oil prices tumbled. Trader awaited cues on what comes next in the US-Israeli war with Iran while mixed messages on a resolution to the conflict kept sentiment frail.

A growing number of economists, including from Westpac, NAB and Deutsche Bank, tipped the RBA to raise interest rates ‌next week, following an inflation warning from a senior official a day earlier.

The central bank was forced to raise rates to 3.85% last month as inflation reaccelerated after three reductions last year. The war in the Middle East ⁠pushed up oil prices, adding pressures to another act.

China's trade surplus rose to its highest on record in the combined January-February period, while exports massively beat expectations, which could reinforce demand for raw material imports.

Australia's economy was growing at an annual rate of 2.6% in Q4, the fastest rate of growth in almost three years, and much stronger than expected. Private investment increased for the 5th consecutive quarter.

Fed funds ⁠futures traders are now pricing in 39.7 bps of cuts by year-end, indicating doubts over whether the Fed will make a second cut this year. That highlights political divergence between the two countries.

Although the Aussie dollar hit a multi-year high, the bearish MACD divergence suggested an imminent retreat. As such, we see it weaken to around $0.7150 before rising further.

Asset recap

As of market close on 10 March, among EBC major products, Micron Technology shares led gains with Citi lifting price target ahead of the chipmaker's results set for March 18.

Paycom announced the launch of Career and Succession Planning, an automated tool to easily identify successors for companywide roles, assess bench strength and ensure talent management and development.

The IEA will convene an extraordinary meeting of its member countries Tuesday to discuss a possible release of oil stockpiles to address the supply disruption triggered by the Iran war.

EBC Financial Group Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC Global Financial Collaboration or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.