I see a lot of commentary for the AUD to bounce as it is oversold. Caution! What reason is there for it to bounce?
1. China is Australia's biggest trading partner. Coronavirus has China panicked and for example Fortescue has been smashed by this panic.
2. Australian growth and CPI is still flat, and Coronavirus could trigger an interest rate cut.
3. USA is in cruise control with strong employment growth and stable GDP growth.
4. However, SPX has seen speed wobbles from CV but earnings report have been solid. SPX is still the place to invest.
if Coronavirus turns into a serious global epidemic we can expect a flight to US Treasuries and there's no reason to need AUD for this. 2008 levels are not out of the question. That's is a long way down unless we see a floor of buyers establshed. Don't catch this knife!
1. China is Australia's biggest trading partner. Coronavirus has China panicked and for example Fortescue has been smashed by this panic.
2. Australian growth and CPI is still flat, and Coronavirus could trigger an interest rate cut.
3. USA is in cruise control with strong employment growth and stable GDP growth.
4. However, SPX has seen speed wobbles from CV but earnings report have been solid. SPX is still the place to invest.
if Coronavirus turns into a serious global epidemic we can expect a flight to US Treasuries and there's no reason to need AUD for this. 2008 levels are not out of the question. That's is a long way down unless we see a floor of buyers establshed. Don't catch this knife!
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Sell opened at .6716. Slight pop after RBA rates decision but this impulse shouldn't last long.
