Market Update - 22nd April 2020 - AUD In A Holding Pattern As Oil Price Get Crushed

Oil Prices Go Negative:

Yes, you read that correctly. For a period this week WTI (U.S produced oil) had negative prices, meaning U.S oil producers were in fact paying oil traders to take their oil away. The reason for this? Covid19 and far less demand for oil products, along with oil storage around the country at full capacity meaning their is literally no where for the oil to go. The price of U.S oil has more recently stabilised just above zero, but it points to a real issue the U.S has with over production of oil.

What's The AUD Doing?

The AUD is holding up very well - AUD/USD is in a consolidation pattern between 0.6250 and 0.6400 however a break out one way or the other I think is likely in the coming weeks. Which way? I don't know. But if I had to bet on it'd be a move higher. AUD/EUR and AUD/GBP also holding nicely, while AUD/JPY remains in the doldrums around 67.00.

Local Employment Data Today:

Aussie employment data is due out at 11.30am this morning. The release is a an interim release of sorts to take into account the impacts of Covid19. There is no reliable forecast and none is given as such we could see a reasonably increased degree of AUD volatility around the release at 11.30am.

AUD EXCHANGE RATES:

AUD/USD – 0.6256

AUD/GBP – 0.5080

AUD/EUR – 0.5759

AUD/NZD – 1.0510

AUD/JPY – 67.461

OTHER MARKETS:

All Ords (XAO) – 5,278

Gold – A$2,684/oz

Silver – A$23.72/oz

Crude Oil – US$13.77 barrel

DATA RELEASES TODAY:

AUD – Retail Sales m/m at 11.30am

Senior FX Manager

Compass Markets

Contact Patrick for a quote on 0431 278 632.

*Above rates are indicative wholesale rates and intended as a guide only. Commentary above is my opinion and should not be construed as financial advice. I recommend you seek professional advice before doing anything of a financial nature.