While US markets paused last night ahead of tomorrow’s Fed meeting, the question for local traders today will be whether our local market can also hold up in the face of weaker commodity prices. General weakness in yesterday’s market appeared to be motivated by a sell Australia view. The weaker Aussie Dollar and the prospects of a commodity correction are likely to be motivating selling of Australian stocks by international investors.
US retail sales over the past two months were disappointing. US consumers clearly remain cautious despite weak gasoline prices and an improving labour market. While the US economy is improving, consumer caution and a moderate growth outlook will constrain the Fed and probably limit it to no more than two rate increases this year.
The market has potentially significant press conferences to assess in the next 24 hours from both China’s Premier Li Keqiang and Fed President Yellen. These both have the potential to influence investor thinking and traders are likely remaining cautious beforehand.
