XE Morning Update

Risk is definitely off the table today, and flights to safe haven currencies are on the menu. As ever, it is the wider backdrop of Coronavirus which has caused the sell off. Specifically we had Apple review their revenue guidance, saying they will be hit by both supply constraints and lack of demand. It highlights an interesting phenomenon with markets at times. Everyone KNOWS that having China off work for a month isn’t going to be good for supply, and everyone KNOWS that having 1 Billion people unable to travel and shop is not going to be good for demand, yet it sometimes needs someone to spell it out to move markets. Reports of shipping companies saying they may be forced to effectively offload or dump chilled containers at the wrong ports can be enough to crystalize consensus into the fact that Coronavirus is a big problem, and it is not going to go away in a few weeks.

Please excuse the rant above, but every now and again you need to step back and take stock of the bigger picture. The Kiwi is a few percent away form 11 year lows. The AUD is less than half a percent away. Coronavirus is not the sole cause of this by any means, but it could be the catalyst to break the lows, with no support for a long way. 

Closer to home, the focus will be back on data, with the Australians focusing on quarterly wage price index. The RBA have been a bit mixed with their signalling of late, but solid wage data today, and employment data tomorrow should help to gauge their next move. 

Global equity markets are mixed, - Dow -0.73%, S&P 500 -0.46%, FTSE -0.69%, DAX -0.75%, CAC -0.48%, Nikkei -1.40%, Shanghai +0.05%

Gold prices are up 1.3% trading at $1,600 an ounce. WTI Crude Oil prices are off, down 1.2% to $51.76 a barrel