Fed Speakers Derail Dollar

Clear messaging from US Federal Reserve board members that US interest rates will rise faster than current market expectations has forced the US dollar higher. Shares fell in a re-pricing of interest rate risk. Gold slumped and industrial commodities tanked after a higher than expected weekly build in oil stocks. This means all arrows for Australian shares are pointing downward today.

In contrast, European shares were flat, despite further pressure on the British pound after a poll showed a majority of Britons favour departure from Europe.

Local share trading may start in line with futures markets, dropping around 35 points at the open. However, trading may be dominated by the fallout from the monthly stock option expiry that occurred overnight. Stocks to watch today are majors.

CBA dominates the list with $357 million dollars’ worth of shares exchanged as a result of option exercises. BHP ($249 million), Rio ($171m), and NAB ($163m) are all in traders’ sights. Macquarie Group and Resmed are unusually high on the option exercise list, which may see exaggerated moves and volumes today.