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The NZDUSD opens at 0.6791(mid-rate) this morning.
The USD continued to slide throughout Fridayâ€™s trading session following Trumpâ€™s comments that the Federal Reserve's plan to gradually raise interest rates could hurt recent economic progress. Late on Friday Trump tweeted "The United States should not be penalized because we are doing so well,â€ and that "tightening now hurts all that we have done," which led to a fresh round of USD selling.
Adding fuel to the fire, St. Louis Fed President James Bullard commented that the Fed should delay further rate hikes. Bullard remarked that the US is facing Imminent yield curve inversion which is a naturally bearish signal for the economy.
The Canadian dollar received a boost on Friday with both consumer inflation for June and retail sales for May printing ahead of expectations. Data from Statistics Canada showed CPI for the month of June inched up by 0.1% (exp unchanged) while retail sales increased by 2% in May following a 1.2% fall in April. Economists had forecast sales to rise by 1%.
Germany's producer prices increased at the fastest pace in 9-months in June, growing at 3% y/y and faster than the 2.7% increase recorded in May.
There is very little in the way of local data releases over the coming week, with the ECB monetary policy statement on Thursday night along with Fridayâ€™s US GDP data releases the pick of the offshore drivers.
Global equity markets were mixed on Friday, - Dow -0.03%, S&P 500 -0.09%, FTSE -0.07%, DAX -0.98%, CAC -0.35%, Nikkei -0.29%, Shanghai +2.05%.
Gold prices edged higher on Friday up 0.7% closing out the week at $1,231 an ounce. WTI Crude Oil prices fell 2% on Friday, to close out the week at $66.64 a barrel.
The Kiwi opens down at 0.6744.We have had a slew of consistently strong US data recently, with last night being no exception. Manufacturing data beat expectations, but the highlight was the Unemployment Claims figure. Although only being a weekly data point, this came in at 207K, which was less than expected at 220K. Not only that, but this figure represents the lowest weekly claim count since 1969.
These releases saw the USD strengthen over 1% across the board, gains that were paired back only when Trump came out on CNBC complaining about interest rate increases.
UK Retail Sales disappointed, coming in down 0.5%. This is however a fairly volatile data set, so did not have too much effect on the rate.
Locally there is very little data of note, with only the Canadian Dollar in the spotlight overnight.
Global equity markets are generally lower, Dow -0.45%, S&P 500 -0.36%, FTSE +0.10%, DAX -0.62%, CAC -0.56%, Nikkei -0.13%, Shanghai -0.53%.
Gold prices are down slightly at $1,223 an ounce, while WTI Crude Oil prices have edged higher, up 0.4% overnight trading at $67.98 a barrel.
The NZDUSD opens at 0.6798 (mid-rate) this morning.
The British pound is the biggest mover overnight, falling sharply after data from the Office for National Statistics showed consumer inflation grew less than expected in June.
The report showed consumer prices increased by 2.4% y/y in June below the forecast of a 2.6% increase and at the growth rate as the previous two months. The month on month data was also shy of expectations, remaining flat, while economists had forecast a 0.2% increase. Core inflation that excludes energy, food, alcohol and tobacco edged down to 1.9% in June from 2.1% in May. The data has dented hopes that the Bank of England will hike interest rates at next monthâ€™s meeting.
Euro-zone CPI printed as expected with the Eurostat report showing consumer prices increased by 2% y/y in June while core inflation edged down to 0.9% from its preliminary reading of 1%. The data release had little effect on the currency.
This morningâ€™s monthly Australian employment report should prove to be the highlight during our trading and will dictate short-term direction of the NZDAUD cross rate.
Global equity markets continue to rise, - Dow +0.26%, S&P 500 +0.15%, FTSE +0.65%, DAX +0.82%, CAC +0.46%, Nikkei +0.43%, Shanghai -0.39%.
Gold prices are unchanged trading at $1,227 an ounce WTI Crude Oil prices have edged higher, up 0.3% overnight trading at $67.68 a barrel.
The NZDUSD opens at 0.6781 (mid-rate) this morning.
After showing little reaction to yesterday morningâ€™s softer than expected Q2 CPI report the NZD surged higher during the afternoon session after the RBNZ upwardly revised its core inflation estimate to a 7-year high of 1.7% in the year to June.
This morningâ€™s Global Dairy Trade (GDT) auction suffered its fourth consecutive fall with the Index down a further 1.7% following on from its 5% fall a fortnight ago.
Rennet Casein along with butter were the biggest movers with prices falling 9.5% and 8.1% respectively. Whole Milk Powder (WMP) along with Skim Milk Powder (SMP) prices both edged higher up 1.5% and 0.8% respectively from the previous auction. Volumes were also down with a total of 25,454MT selling under the hammer.
An upbeat testimony from Federal Reserve Chairman Jerome Powell during his semi-annual testimony before Congress this morning has seen the USD outperform its rivals. Powell said the US economy continues to grow at a solid pace and that the latest data suggests economic growth in the second quarter was "considerably stronger" than in the first quarter. Powell referred to the latest inflation data as "encouraging" with the Fed confident that that inflation along with the job market will â€œremain strongâ€.
The GBP is the worst performing of the G10 currencies falling sharply ahead of another parliamentary vote on Theresa Mayâ€™s Brexit plans. Although it has just been announced that the government narrowly won the vote on a trade bill, fears that the government will face further Brexit challenges is continuing to weigh on the GBP.
Global equity markets are broadly higher, - Dow +0.22%, S&P 500 +0.39%, FTSE +0.34%, DAX +0.80%, CAC +0.24%, Nikkei +0.44%, Shanghai -0.57%.
Gold prices are down 1% trading at a 12mth low of at $1,227 an ounce WTI Crude Oil prices have gained 0.6% overnight trading at $67.49 a barrel.
The NZDUSD opens at 0.6771 (mid-rate) this morning.
The NZD has traded tight ranges against all its rivals as investors look to this morningâ€™s inflation report for direction.
The current market expectations are for NZâ€™s consumer price index to have increased by 0.5% in the second quarter for an annualised rate of 1.6%.
Yesterday afternoons China data disappointed with the National Bureau of Statistics report showing GDP expanded by 6.7% y/y in the three months to June. The result although in line with expectations was the slowest expansion since Q3 2016.
Overnight the US retail sales for the month of June increased in line with economist estimates, with the Commerce Department reporting retail sales increased by 0.5% following on from a upwardly revised 1.3% spike in May. Mayâ€™s retail sales had previously been reported as a 0.8% increase. The core retail sales, which exclude auto sales rose by 0.4% again in line with expectations, following a 1.4% surge in May.
Tonight investors will turn their attention to Fed Chair Jerome Powell's congressional testimony on monetary policy and what effects if any, the US china trade war may have on future rate hike decisions.
Global equity have had a mixed start to the week, - Dow +0.10%, S&P 500 -0.10%, FTSE -0.66%, DAX -0.16%, CAC +0.09%, Nikkei Closed, Shanghai -0.83%.
Gold prices are little changed at $1,240 an ounce WTI Crude Oilprices have plummeted, down 4.1% trading at $67.09 a barrel.
The NZDUSD opens at 0.6761 (mid-rate) this morning.
The NZD edged lower against all its major rivals on Friday, with markets on the whole lacking direction.
The USD came under pressure late on Friday after the University of Michigan released its preliminary consumer sentiment report for the month of July. The report showed an unexpected fall in consumer sentiment with the index slipping to 97.1 in July, following on from a final June reading of 98.2. The index had been forecast to remain unchanged.
The British pound lost ground against the majors after President Trump, during an interview with The Sun newspaper said that a "soft Brexit" strategy would "affect trade with the United States, unfortunately in a negative way." Trump believes that the current proposed Brexit deal would mean that the US would be dealing with the European Union instead of dealing with the UK, so it will probably kill the deal.
The key drivers during our trading session today will come from Chinaâ€™s data dump due to hit the tapes at 2:00pm, while tomorrowâ€™s quarterly inflation report will dictate direction for the NZD this week.
Global equity markets edged higher on Friday, - Dow +0.38%, S&P 500 +0.10%, FTSE +0.14%, DAX +0.38%, CAC +0.43%, Nikkei +1.85%, Shanghai -0.23%.
Gold prices slipped lower on Friday down 0.5% closing out the week at $1,241 an ounce. WTI Crude Oil prices fell back below $70 a barrel on Friday, to close out the week at $69.95 a barrel.
The NZD opens at 0.6771 this morning.
Markets generally shrugged off news of Trumps $200 Billion tariff increase yesterday, with Chinaâ€™s lack of reciprocal escalation (so far) helping to calm markets.
US Monthly CPI came in at 0.1%, slightly missing the 0.2% expected. This is a monthly figure though, so can tend to be a touch more volatile, leading to more muted responses. Even so, this helped to arrest some of the recent slide in the Kiwi.
Fairly light data on the calendar, with the Chinese Trade Balance expected to big the biggest mover. The timing on its release however, is still tentative at this stage.
Global equity markets are actually quite buoyant, Dow 0.86%, S&P 500 0.79%, FTSE 0.78%, DAX 0.61%, CAC 0.97%, Nikkei 1.17%, Shanghai 2.16%.
Gold prices are up slightly, trading at $1,247 an ounce WTI Crude Oil prices have stabilised a touch, trading at $70.23 a barrel.
The NZDUSD opens at 0.6765 (mid-rate) this morning.
An escalation in the US China trade war has seen risk sold aggressively with global equity markets commodities and commodity linked currencies all sharply lower.
Yesterday US President Donald Trump ordered US Trade Representative Robert Lighthizer to begin the process of imposing tariffs of 10% on an additional $200 billion of Chinese imports.
Producer prices in the US came in ahead of expectations with the Labour department report showing its producer price index rose by 0.3% in June after climbing by 0.5% in May. Economists had expected prices to inch up by 0.2 percent.
The CAD is trading higher against all its rivals after the Bank of Canada hiked its benchmark rate by a 0.25% for a second time this year. In the accompanying statement the Bank governor said that higher interest rates would be necessary to keep inflation near target.
Crude oil prices are sharply lower after OPEC reported Saudi Arabia's oil production increased by nearly 500,000 barrels per day in June as it ramps up supply to tame the cost of crude.
Global equity markets are sharply lower, - Dow -0.82%, S&P 500 -0.52%, FTSE -1.30%, DAX -1.53%, CAC -1.48%, Nikkei -1.19%, Shanghai -1.76%.
Gold prices are down 1% trading at $1,243 an ounce WTI Crude Oil prices have plummeted, down 4.1% trading at $69.58 a barrel.
The NZDUSD opens at 0.6838 (mid-rate) this morning.
A lack of tier one economic data has seen markets consolidate, with the NZD little changed against the majority of its trading partners.
In the first ever monthly estimate, UK gross domestic product rose 0.3% m/m in May following on from a 0.2% rise in April and a flat reading in March. The 0.3% increase is the strongest since November 2017 and increases the likelihood that the Bank of England will hike rates in August.
German investor confidence now sits at a 6-year low with survey data from the Centre for European Economic Research showing the ZEW Indicator of Economic Sentiment plummeted 8.6 points to minus 24.7 in July, its lowest level since August 2012. Economists had expected the index to edge down to -17.9 from Juneâ€™s reading of -16.1.
Strikes by oil workers in Norway and Gabon have seen oil prices push higher with West Texas Intermediate crude now trading back above $72.50 a barrel.
Economic data during our trading session is again thin at best, while overnight the latest Bank of Canada monetary policy statement along with US crude oil inventories will be the main focus for investors.
Global equity markets are pushing higher, - Dow +0.5%, S&P 500 +0.24%, FTSE +0.05%, DAX +0.53%, CAC +0.67%, Nikkei +0.66%, Shanghai +0.44%.
Gold prices are little changed trading at $1,256 an ounce WTI Crude Oil prices are again higher, up 0.9% trading at $72.56 a barrel.
The NZDUSD opens at 0.6839 (mid-rate) this morning.
The British pound is the worst performing of the G10 currencies, falling sharply after the UK Foreign Secretary Boris Johnson became the latest big-name government minister to resign in protest over Prime Minister Theresa May's Brexit policy. Boris Johnsonâ€™s resignation comes hot on the hells of the resignation of David Davis who resigned earlier in the day after Theresa May back tracked on some of her â€œred linesâ€ in the latest Brexit negotiations. In his letter of resignation Boris Johnson claimed that the UK was headed â€œfor the status of a colonyâ€ if Theresa Mayâ€™s soft Brexit plans were adopted.
Overnight survey data from think tank Sentix showed Euro-zone investor sentiment improved in July following on from Juneâ€™s fall. The investor confidence index unexpectedly increased to 12.1 in July after sinking to 9.3 in June. Economists had been expecting the index to edge down to 9.0.
An absence of US data has seen the USD trade tight ranges against all its major rivals with the NZDUSD rate little changed from yesterdayâ€™s open.
During our trading day investors will look to chinaâ€™s inflation data for direction with CPI for the month of June expected to inch up to 1.9% from Mayâ€™s 1.8% reading.
Global equity markets are broadly higher, - Dow +1.27%, S&P 500 +0.73%, FTSE +0.92%, DAX +0.38%, CAC +0.42%, Nikkei +1.21%, Shanghai +2.47%.
Gold prices have pushed higher, up 0.4% trading at $1,259 an ounce WTI Crude Oil prices are slightly higher, up 0.3% trading at $71.78 a barrel.
The NZDUSD opens at 0.6838 (mid-rate) this morning.
There was little negative market reaction on Friday to the news that the US was going ahead with tariffs on $34bn of Chinese goods or that China had immediately retaliated by imposing a similar 25% tariff on 545 US products - also worth a total of $34bn.
Global equity markets along with risk-linked currencies actually pushed higher on the announcement, in what was a clear example of sell the rumour buy the fact.
The USD pushed lower later in the day following the release of the mixed jobs report, although the Labour Department non-farm payroll report showed employment spiked by 213k jobs in June after jumping up by an upwardly revised 244k jobs in May, unemployment for the same period also unexpectedly ticked up. The unemployment rate in the US which had be expected to remain at 3.8% increased to 4% with the USD falling following the data release.
Germanyâ€™s Industrial output increased 2.6% month-on-month in May reversing a revised 1.3% fall in April. The result was well ahead of the forecast 0.3% increase and represents the biggest expansion in 6-months.
News that the UKâ€™s PM Theresa May had gained cabinet support for a pro-business plan which includes a free trade area for industrial and agricultural goods, based on a "common rule book" and a "combined customs territory" has seen the pound gap higher this morning.
Markets this week are likely to be dominated by trade war talks with little in the way of local data releases.
Global equity markets pushed higher on Friday, - Dow +0.41%, S&P 500 +0.85%, FTSE +0.19%, DAX +0.26%, CAC +0.18%, Nikkei +1.12%, Shanghai +0.49%.
Gold prices edged lower on Friday down 0.2% closing out the week at $1,254 an ounce. WTI Crude Oil prices fell circa 2% on Friday, to close out the week at $71.57 a barrel
The NZDUSD opens higher at 0.6789 this morning.
The NZDUSD pushed higher overnight as the USD fell after data showed private payrolls rose less than forecast and amidgrowing concerns about global trade.
The EUR rallied on strong German industrial orders and reports the US will suspend the imposition of tariff on cars imported from the EU, providing the EU lifts duties on US car imports.
The GBP gained ground after Bank of England Governor Mark Carney said he was confident an economic slowdown was temporary, however the rally was short-lived ahead of a government meeting on Brexit.
The US is due to slap USD$34 billion of tariffs on Chinese products at 12:01am Eastern US time Friday. China has stated it will respond in kind, while Trump has threatened to impose further tariffs on USD$450 billion of Chinese imports if Beijing does not yield to his demands and continues to retaliate. This serious threat to global trade has been weighing heavily on the NZD & AUD in recent weeks.
Global equity markets were generally stronger on the day â€“ Dow +0.7%, S&P500 -0.9%, FTSE +0.4%, DAX +1.2%, CAC +0.9%, Nikkei -0.8%, Shanghai -0.9%.
Gold prices gained 0.81 to USD$1,257 an ounce. Oil prices (WTI) jumped 1.5% higher to USD$72.97 per barrel.
The markets are eagerly awaiting the release of US non-farm payrolls and unemployment data Friday night.
The NZDUSD opens at 0.6756 (mid-rate) this morning.
As news broke that German Chancellor Angela Merkel and her coalition partners had reached a compromise deal on migration policy European equity markets along with risk-linked currencies retraced yesterdayâ€™s fall.
This morning the Global Dairy Trade index suffered a steep fall, down 5% from the previous auction a fortnight ago. The fall in the overall index was led by Whole Milk Powder (WMP) prices which plummeted 7.3% to $2,905MT with Skim Milk Powder (SMP) prices also sharply lower, down 4.6% to $1,913MT. A total figure of 26,519MT was sold under the hammer.
The USD is down slightly against its major rivals in what has been a subdued trading session as the US wind down ahead of the July holiday celebrations.
US Treasury yields have moved lower with the 10-year note down 5bps to 2.83% after China pledged to keep its currency stable at 11-month lows against the USD, as trade tensions increase ahead of the July 6th deadline.
The overnight Euro-zone producer price inflation for the month of May hit a 12-month high with Eurostat reporting Industrial producer prices climbed 3.0% y/y in May following on from a 1.9% increase in April.
The UK construction Purchasing Managers' Index increased to 53.1 in June from 52.5 in May. The result was well ahead of the forecast 52.6 reading.
Global equity markets are mixed, - Dow -0.54%, S&P 500 -0.49%, FTSE +0.60%, DAX +0.91%, CAC +0.76%, Nikkei -0.12%, Shanghai +0.41%.
Gold prices have retraced yesterdayâ€™s fall, up 0.8% trading at $1,252 an ounce WTI Crude Oil prices are marginally lower, down 0.2% trading at $71.65 a barrel.
The NZDUSD opens at 0.6705 (mid-rate) this morning.
Risk aversion brought about by political uncertainty in Germany and US trade tariffs has seen equity markets fall and safe-haven currencies outperform.
Germanyâ€™s political crisis worsened yesterday with interior minister Horst Seehofer, who is also head of the Bavarian CSU party offering his resignation as party head and interior minister, saying that he wasn't satisfied with the EU deals. Following closed door discussions with his party members he agreed to give Merkel another 3-day ultimatum to find a comprise - otherwise he definitely would resign.
Concerns that the US will go ahead and impose tariffs on $34 billion worth of Chinese imports and that China will retaliate in kind on July 6th unless both sides can make enough progress toward a trade cease-fire this week, has seen equity markets slip lower overnight.
The USD was also helped higher by better-than-expected manufacturing data with the Institute for Supply Management (ISM) reporting its purchasing managers index climbed to 60.2 in June after rising to 58.7 in May. The index had been forecast to edge down to 58.4.
The UK manufacturing sector continues to expand at a moderate pace with the Purchasing Managers' Index edging up to 54.4 in June, from 54.3 in May. The result was ahead of the expected 54.2 reading.
The highlight for the NZD today will be our business confidence report while direction for the NZDAUD cross rate will be come from this afternoonâ€™s RBA monetary policy statement.
Global equity markets are broadly lower, - Dow -0.19%, S&P 500 -0.15%, FTSE -1.17%, DAX -0.55%, CAC -0.88%, Nikkei -2.21%, Shanghai -2.52%.
Gold prices are down 0.8% trading at $1,242 an ounce WTI Crude Oil prices have slipped lower, down 0.9% trading at $71.81 a barrel.
The NZDUSD opens at 0.6772 (mid-rate) this morning.
The EUR was the strongest performing currency on Friday helped higher after news broke that European Union leaders had reached a hard-fought agreement on migration. The agreement offers respite to German Chancellor Angela Merkelâ€™s coalition government, which had been in danger of falling apart in the event that a deal could not be reached.
The British pound received a boost after a better-than-expected revision to Britainâ€™s Q1 growth. The Office for National Statistics final reading showed gross domestic product increased by 0.2% sequentially in Q1, an upward revision of 0.1% from the previous report.
Personal income in the US increased in line with economist estimates in the month of May, with the Commerce Department reporting personal income climbed by 0.4% following on from a downwardly revised 0.2% result in April. April was originally reported to have increased by 0.2%.
With very little in the way of domestic drivers, investors will look toFridayâ€™s FOMC meeting minutes along with the weekendâ€™s non-farm-payrolls for direction.
Global equity markets finished the quarter in positive territory, - Dow +0.23%, S&P 500 +0.08%, FTSE +0.28%, DAX +1.06%, CAC +0.+91%, Nikkei +0.15%, Shanghai +2.17%.
Gold prices edged higher on Friday up 0.3% closing out the quarter at $1,252 an ounce. WTI Crude Oil prices edged lower on Friday, to close out the quarter at $72.46 a barrel.
The NZDUSD opens lower at 0.6751 this morning.
The NZDUSD fell to a 2-year low of 0.6745 overnight, as the USD strengthened across the board, despite US quarterly GDP numbers coming in below expectations.
Yesterday, the RBNZ kept the Official Cash Rate at 1.75%, as expected. They signalled no interest rate hike was on the horizon and that monetary policy would remain stimulatoryfor some time to come.
German inflation data surprised on the upside, but the EURwas pressured by concerns over a European Union leaders meeting on migration which German Chancellor Angela Merkeltermed â€œmake or breakâ€ for the EU.
The GBP fell on worries of lack of progress on Brexit talks, and the potentially negative impact on the UK economy if no deal is agreed.
The Chinese Yuan has been falling fast in recent days. This has the potential to heighten US-China tension, given President Trump has previously branded China a currency manipulator.
Global equity markets were mixed on the day â€“ Dow +0.4%, S&P500 0.6%, FTSE -0.1%, DAX -1.4%, CAC -1.0%, Nikkei -1.0%, Shanghai -1.0%.
Gold prices dropped 0.8% to USD$1,248 an ounce. Oil prices (WTI) jumped over 3% higher to USD$72.76 per barrel.
The NZDUSD opens at 0.6787 (mid-rate) this morning.
Yesterdayâ€™s business confidence survey which showed confidence now sits at a 7-month low put further downward pressure on the local currency. The NZD is currently trading at 7-month lows against the USD having hit 0.6800 this morning. RBNZ stated NZ Official Cash Rate unchanged at 1.75 percent.
The overnight US economic data under whelmed with Both core durable goods which exclude transportation equipment, decreasing by 0.3% in May following on from a 1.9% surge in orders in April. Core orders had been expected to increase by 0.5%.
The US pending home sales index fell by 0.5% to 105.9 in May according to the latest National Association of Realtors (NAR) report. Economists had expected home sales to increase by 0.5% after falling by 1.3% to 106.4 in April.
The EUR is under pressure after talks between Merkel's CDU and her CSU allies over migration policy broke down. Merkel and her interior minister Horst Seehofer have been butting heads with Seehofer who is also the leader of the CSU party wanting to refuse entry into Germany for any migrant that has already registered in another European country, while Merkel is pushing for any change in policy to be brought about at a coordinated EU level. Yield on the German 10-year note fell 0.32% on the news.
Global equity markets remain mixed, - Dow -0.16%, S&P 500 -0.23%, FTSE +1.11%, DAX +0.93%, CAC +0.87%, Nikkei -0.31%, Shanghai -1.10%.
Gold prices have edged down 0.3% trading at $1,254 an ounce WTI Crude Oil prices have continued to surge higher, up 3.2% trading at $71.25 a barrel.
The NZDUSD opens at 0.6851 (mid-rate) this morning.
The NZD is down against all its major rivals as investors await tomorrow morningâ€™s RBNZ monetary policy statement. Although it is all but a given that the RBNZ will keep interest rates unchanged for the 11th consecutive meeting, investors will be looking to the statement to see whether the Bank will alter its neutral stance in favour of an easing bias.
Overnight the US Conference Board released its monthly consumer confidence report for the month of June. The report showed the confidence index unexpectedly fell to 126.4 in June from an upwardly revised 128.8 in May. Economists had expected the index to show a marginal increase to 128.1 from the 128.0 originally reported for the previous month.
Crude oil prices spiked higher overnight after the US State Department announced that companies that currently buy Iranian crude oil must completely cut those exports by the start of November or else they will face powerful US sanctions.
Today the release of our trade balance and business confidence are expected to underwhelm and keep downward pressure on the NZD ahead of tomorrow morningâ€™s RBNZ monetary policy statement.
Global equity markets are mixed, - Dow +0.38%, S&P 500 +0.53%, FTSE +0.37%, DAX -0.29%, CAC -0.05%, Nikkei +0.02%, Shanghai -0.52%.
Gold prices are down 0.7% trading at $1,258 an ounce WTI Crude Oil prices have surged higher, up 3.1% trading at $69.06 a barrel.
The NZDUSD opens at 0.6895 (mid-rate) this morning.
Trade war concerns have weighed heavily on risk with equity markets, commodities and commodity linked currencies all firmly in negative territory.
President Donald Trump has continued add petrol to the trade war fire this time tweeting "The United States is insisting that all countries that have placed artificial Trade Barriers and Tariffs on goods going into their country, remove those Barriers & Tariffs or be met with more than Reciprocity by the U.S.A. Trade must be fair and no longer a one way street!"
Despite further disappointing economic data this time by way of further weakness in Germanyâ€™s business sentiment the EUR along with the JPY have outperformed as safe-haven currencies.
Germanyâ€™s business confidence index weakened further during June with the Ifo Institute reporting the index fell from 102 in May to 101.8 in June. Economists had expected the index to edge down to 101.9.
Again there is little in the wat of economic data during our trading session while overnight investors will look to the US consumer confidence report for direction.
Global equity markets have fallen sharply, - Dow -1.98%, S&P 500 -1.99%, FTSE -2.24%, DAX -2.46%, CAC -1.92%, Nikkei -0.79%, Shanghai -1.05%.
Gold prices are little changed trading at $1,267 an ounce WTI Crude Oil prices are down 1% trading at $66.97 a barrel.
The NZDUSD opens at 0.6915 (mid-rate) this morning.
The NZD pushed higher throughout our trading day on Friday and managed to hold on to its gains with a lack of US economic data resulting in light trading flows.
The EUR rallied on Friday after the Euro-zone private sector composite output index unexpectedly increasing to 54.8 in June, up from 54.1 in May. Economists had forecast the index to edge down to 53.4.
Trade concerns are likely to continue to dominate markets going in to quarter end with Trump once again active on Twitter, this time announcing he will look to impose the new tariffs on the EU unless the EU removes tariffs and trade barriers placed on the US.
Trump is insisting that the current Tariffs and Barriers that the US companies face when exporting into Europe are â€œnot soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the USâ€
Crude oil prices rocketed higher on Friday after OPEC agreed to raise output by one million barrels a day starting next month but fell short of announcing which countries would be increasing their current production with some economists struggling to see how nations like Nigeria and Libya can lift their current production.
Global equity markets with the exception of the Nikkei rallied on Friday, - Dow +0.49%, S&P 500 +0.18%, FTSE +1.67%, DAX +0.54%, CAC +1.34%, Nikkei -0.78%, Shanghai +0.49%.
Gold prices were flat on Friday having lost 0.6% over the course of the week WTI Crude Oil prices spiked higher on Friday, up 4.6% to close out the week at $67.63 a barrel.
New Zealand welcomes the birth of Prime Minister Jacinda Adernâ€™s first child, a baby girl, but its been the Kiwi that's needed an epidural for most of the week. It has finally found a touch of support, bouncing from its low of 0.6822
With little data expected today, we would need some more trade war rhetoric to test the 2017 lows of 0.6778
As expected the UK Monetary Policy Committee voted to keep their Official Bank rate at 0.5%, however the number of members who voted for an increase lifted from 2 to 3. This will be sure to liven up the next meeting, and has helped the Pound to a 4 week high against the NZD.
Canadian CPI comes in overnight, but there is little else to note till Consumer Confidence comes out of the US early Wednesday morning.
Global equity markets are generally lower across the board, -Dow -0.67%, S&P 500 -0.51%, FTSE -0.93%, DAX -1.44%, CAC -1.05%, Nikkei +0.61%, Shanghai -1.37%.
Gold prices rebounded, up 1.3%, at $1,286 an ounce. WTI Crude Oil prices edged lower down 0.8% to $65.60 a barrel.
The NZDUSD opens at 0.6861 (mid-rate) this morning.
Yesterdayâ€™s current account data showing a slowdown in international trade is likely to have weighed on the economy. As of this morning consensus suggests markets are predicting our economy to have grown at a rate of 0.5% during Q1 with an annual rate of growth of 2.7%, this follows on from Q4 when our economy grew at 0.6% with an annual growth rate of 2.9%.
Earlier this morning the National Association of Realtors reported existing home sales Unexpectedly declined in May. The report showed sales were down 0.4% to an annual rate of 5.43m, the result came as a surprise with forecasts predicting a slight rise in sales following on from Aprilâ€™s 2.7% fall.
A larger than expected fall in US oil inventories has seen oil prices rise. The US Energy Information Administration reported crude supplies dropped by 5.9m barrels for the week ended June 15. Economists had expected supplies to fall by 3.7m barrels.
Overnight tonight, both the Swiss National Bank and the Bank of England are expected to leave their OCRâ€™s unchanged leaving the tone of the accompanying statements to dictate direction.
Global equity markets are broadly higher- Dow +0.05%, S&P 500 +0.04%, FTSE +0.31%, DAX +0.14%, CAC -0.34%, Nikkei +1.24%, Shanghai +0.27%
Gold prices continue to edged lower, down 0.5% trading at $1,270 an ounce. WTI Crude Oil prices have pushed higher, up 2.1% trading at $66.11 a barrel.
The NZDUSD opens at 0.6895 (mid-rate) this morning.
Trade war concerns continue to dominate markets. Global equity markets and commodity prices have fallen further after President Donald Trump instructed US Trade Representative Robert Lighthizer to identify $200 billion worth of Chinese goods for additional tariffs at a rate of 10%. Trump has said he will impose these new tariffs if China refuses to change its â€œunfair trade practicesâ€ and insists on going forward with recently announced tariffs.
Overnight the latest Global Dairy Trade auction resulted in a slight fall in prices with the overall index down 1.2% following on from a 1.3% fall at the previous auction a fortnight ago. Both WMP index and the SMP index edged down circa 1% while the lactose index (LAC) was the big mover gaining 8.2%. Butter milk powder which surged by 17.7% at the previous auction was not offered at this morningâ€™s event.
The latest US housing report has sent mixed signals to the market with housing starts rocketing by 5.0% an annual rate of 1.350m in May, while for the same month building permits plunged by 4.6% to an annual rate of 1.301m.
This morning European Central Bank President Mario Draghi, while speaking at a central banking conference in Sintra, Portugal reiterated that the ECB will adopt a patient approach to tightening policy, signalling that interest rates will remain on hold till the end of the 2019 European summer.
Crude oil prices have slipped lower on speculation that OPEC will agree to up production after this week's meeting in Vienna. Russia is also widely expected to increase its supply.
Global equity markets continue to fall- Dow -1.12%, S&P 500 -0.51%, FTSE -0.36%, DAX -1.22%, CAC -1.10%, Nikkei -1.77%, Shanghai -3.78%.
Gold prices have edged lower, down 0.2% trading at $1,276 an ounce. WTI Crude Oil prices have given back yesterdayâ€™s gains, down 1.6% trading at $64.72 a barrel.
The NZDUSD opens at 0.6932 (mid-rate) this morning.
The NZD is little changed from yesterdayâ€™s open amid subdued trading action as investors assess the potential impact of rising trade tensions between the US and China.
Global equity markets have slipped lower with European markets among the worst performers as German Chancellor Angela Merkel's leadership comes into question over migrant issues. Yesterday Merkel was given a two-week time limit by her Interior Minister, Horst Seehofer to convince European delegates to revamp their current migration plan or he will push for Germany to implement border restrictions.
Earlier this morning the British Chambers of Commerce downwardly revised its UK growth forecasts for both 2018 and 2019 blaming a "lacklustre outlook" for consumer spending, business investment and trade. GDP growth for 2018 is now expected to hit 1.3% down from 1.45 while 2019 growth is now forecast to sit at 1.4%, down from the previous forecast of 1.5%.
Home builder confidence in the US slipped lower with the NAHB/Wells Fargo Housing Market Index (HMI) falling 2 points to 68 in June. A sharp rise in lumber prices is the main catalyst for the fall.
The only data of note during our trading day is the Westpac Consumer Sentiment report and the RBA meeting minutes neither of which are expected to have much impact on our currency.
Global equity markets continue to slip lower- Dow -0.47%, S&P 500 -0.23%, FTSE -0.03%, DAX -1.36%, CAC -0.93%, Nikkei -0.75%, Shanghai -0.73%.
Gold prices are unchanged trading at $1,279 an ounce. WTI Crude Oil prices have pushed higher, up 1.1% trading at $65.76 a barrel.
The NZDUSD opens at 0.6949 (mid-rate) this morning.
Global trade war concerns resurfaced on Friday after President Trump announced plans to impose a 25% tariff on $50b worth of Chinese products that contain â€œindustrially significant technologies." The Chinese were quick to react, ignoring Trumpâ€™s threats of further tariffs should China retaliate and announced that they would impose 25% tariffs on $50b of imported US goods.
Global equities, commodities, and by association commodity linked currencies are all sharply lower.
US economic indicators were mixed with consumer confidence and New York manufacturing activity both exceeding their forecasts while industrial production unexpectedly declined during the month of May.
The EUR pushed higher late on Friday boosted by rising consumer prices. Data from Eurostat showed that inflation rose to 1.9% in May following on from an upwardly revised 1.3% increase in April. Core inflation which excludes the cost of energy, food, alcohol and tobacco, also increased in May, to 1.1% from revised 0.8% in April.
The week ahead will be dominated by Central Bank speak with heads of the ECB, Federal Reserve, BOJ and the RBA all due to speak at various times over the course of this week. As far as domestic drivers Thursdayâ€™s Q1 GDP will be the highlight for the NZD this week.
Global equity markets finished the week lower on Friday, - Dow -0.34%, S&P 500 -0.10%, FTSE -1.70%, DAX -0.74%, CAC -0.48%, Nikkei +0.50%, Shanghai -0.73%.
Gold prices fell sharply on Friday down 1.8%%, closing out the week at $1,279 an ounce. WTI Crude Oil prices plunged lower on Friday, down 2.9% to close out the week at $65.06 a barrel.
The NZDUSD opens at 0.6987 (mid-rate) this morning.
A dovish ECB has seen the EUR hit hard, while the USD is stronger across the board after the FOMC statement yesterday morning. The Kiwi has put in a mixed performance in the last 24 hours â€“ lower against the USD and JPY, but higher against the other majors.
The Kiwi has traded an 81 point or 1.15% range this week against the USD, which was also Thursdayâ€™s date range. While the NZD/USD has moved lower this week we would have expected a bigger move to the downside, which is surely coming in the weeks ahead after the Fed rate hike.
The NZD/AUD has traded a 130 point range or 1.41% this week â€“ surging to a high of 0.9338 from 0.9208.
ECBâ€™s Draghi signalled that Net Asset purchases currently at a monthly pace of EUR 30 billion, will end at the end of September 2018, subject to incoming data, then at EUR 15 billion to the end of December 2018. The Governing Council decided that the interest rate on the main refinancing operations, marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.40% respectively.
In the week ending June 9, the advance figure for seasonally adjusted U.S. Initial Claims was 218,000, a decrease of 4,000 from the previous week's unrevised level of 222,000. The 4-week moving average was 224,250. U.S. Retail Sales posted the biggest gain in six monthsjumping 0.8% last month ahead of the market consensus of a 0.4% rise. Retail Sales were up 5.9% from May 2017.
U.K. Retail Sales increased 1.3% in May 2018 from April and up 3.9% from May 2017
Global equity remain mixed: Dow -0.23%, S&P 500 +0.19%, FTSE +0.81%, DAX +1.68%, CAC +1.39%, Nikkei -0.99%, Shanghai -0.18%.
Gold prices have rallied 0.7% trading at $1,302 an ounce. WTI Crude Oil prices surged 0.9% higher trading at $66.97 a barrel.
The NZDUSD opens at 0.7011 (mid-rate) this morning.
This morning and in line with expectations the Federal Reserve Raised its official cash rate range by 25 basis points to 1.75%-2.00%, with the accompanying statement viewed as â€œhawkish.â€
Key points from the statement
Fed sees 2 further hikes in 2018. Fed raises inflation forecasts for both 2018 and 2019. Fed raises median 2018 GDP forecast to 2.8%. Leaves longer-run rate unchanged. Household spending has picked up. Risks to economic outlook appear balanced. Economic activity has been rising at a solid rate. Monetary policy remains accommodative. The USD has strengthened against all its rivals with the NZDUSD falling sharply after touching 0.7050 ahead of the announcement.
Yields on US treasuries advanced following the announcement with 2-year yields posting a 3-week high and compressing the gap between the 2-year and 10-year by 40 basis points its narrowest since march 2010.
UK inflation continues to run at 2.4% according to Office for National Statistics report. The result for the month of May was in line with forecasts.
After recovering in March Euro-zone industrial production declined in April with the Eurostat report showing Industrial output fell 0.9% m/m after rising by an upwardly revised 0.6% in March.
This morningâ€™s Australian employment data will be the main focus during our trading day while later this evening investors will look to the ECB monetary policy statement along with the US retail sales report for direction.
Global equity remain mixed- Dow -0.10%, S&P 500 -0.23%, FTSE -0.00%, DAX +0.38%, CAC -0.01%, Nikkei +0.38%, Shanghai -0.97%.
Gold prices are inching lower, down 0.2% trading at $1,293 an ounce. WTI Crude Oil prices continue to edged higher, up 0.3% trading at $66.40 a barrel.
The NZDUSD opens at 0.7005 (mid-rate) this morning.
Markets lacked direction for much of yesterday as investors awaited the outcome of the Singapore summit. Although both leaders hailed the success of their meeting, describing it as the first step towards a â€œbright futureâ€ and signing an agreement with North Korea agreeing to denuclearise in exchange for security guarantees the lack of detail has created scepticism among many analysts.
This morning's US inflation data equalled economistsâ€™ estimates with consumer prices in the month of May increasing by 0.2%. Core prices which exclude both food and energy prices increased by 0.2% modestly ahead of the forecast 0.1% increase.
German investor confidence disappointed once again with the ZEW economic sentiment index plummeting by 7.9 points to -16.1 points (its lowest level since June 2012). Economists had expected the index to drop to -14 points.
The UK Office for National Statistics employment report showed the unemployment rate remained unchanged at 4.2% its lowest level since 1975.
Tomorrow morning the Federal Reserve are expected to raise their cash rate by 25 basis points with investors focusing on the Fedâ€™s dot-plot for any indications that the Fed may be considering a further two hikes at back end of this year.
Global equity are mixed- Dow -0.22%, S&P 500 +0.05%, FTSE -0.43%, DAX +0.00%, CAC -0.38%, Nikkei +0.33%, Shanghai +0.89%.
Gold prices are inching lower, down 0.3% trading at $1,295 an ounce. WTI Crude Oil prices have edged higher, up 0.2% trading at $66.22 a barrel.
The NZDUSD opens at 0.7021 (mid-rate) this morning.
Global equity markets are pointing higher and currency markets have consolidated ahead of todayâ€™s Singapore summit.
An increase in risk appetite has seen the JPY underperform, and it is the weakest of the G10 currencies despite an impressive surge in core machinery tool orders, which increased by 10.1% in April well ahead of the expected 2.4% rise.
The EUR is sitting at 2-week highs against the USD after Italy's economy minister Giovanni Tria announced the country's new populist government isn't considering leaving the Euro-zone or adding to the high public debt load. Italyâ€™s equity index which fell sharply last month on concerns that the new administration might consider pulling Italy out of the euro spiked 3.4% on the news.
Some poor UK economic data overnight has seen the GBP slip lower against the majors. An unexpected sharp fall of 1.4% in UK manufacturing production along with a 0.8% decline in industrial production were the main catalysts.
Markets are likely to remain subdued with investors keen to hear the outcome of todayâ€™s summit before adding to their positions, while overnight the latest inflation data out of the US should dictate USD direction ahead of Thursdayâ€™s FOMC meeting.
Global equity are broadly higher- Dow +0.22%, S&P 500 +0.29%, FTSE +0.73%, DAX +0.60%, CAC +0.43%, Nikkei +0.48%, Shanghai -0.47%.
Gold prices are inching higher, up 0.2% trading at $1,299 an ounce. WTI Crude Oil prices are little changed trading at $66.07 a barrel.
The NZDUSD opens at 0.7031 (mid-rate) this morning.
The Kiwi is relatively flat and the AUD is the best performing currency in the past 24 hours after the Australia GDP was announced yesterday, with the EUR also performing well.
Australia's economy expanded faster than forecast in the first quarter as exports rebounded, underscoring the RBAâ€™s expectation for stronger growth this year. Gross Domestic Product advanced 1% from the prior quarter, with overseas shipments accounting for half the expansion, the Australian Bureau of Statistics reported yesterday. Expectation was +0.9%
ECB Chief Economist confirmed yesterday's Bloomberg storythat at the June 14 policy meeting the Governing Council will be considering â€œwhether the progress so far has been sufficient to warrant a gradual unwinding of our net asset purchasesâ€. The ECBâ€™s Knot later told the Dutch Parliament that â€œitâ€™s reasonable to announce the end of the net asset purchases soonâ€.
The U.S. Energy Information Administration reported overnight that crude supplies climbed by 2.1 million barrels for the week ended June 1. Analysts were expecting a decline of 1.3 million barrels while the American Petroleum Institute on Tuesday reported a fall of 2 million barrels. WTI Crude traded a 64.27 to 65.96 range but overall fell 1.1% from yesterdayâ€™s to open at 64.79
The U.S. Trade Balance fell to a seven month low in April as exports rose to a record high. The Trade Balance dropped 2.1% to USD46.2 Billion the smallest since September 2017. The consensus was for no change at USD 49.0 Billion.
Eurozone Retail Sales rose in May, reversing the downturn seen in April. The increase was indicative of sharper rises in Germany and France and a slower decline in Italy. The HIS Markit Eurozone Retail PMI rose to 51.7 in May from 48.6 in Aprilsignalling the sharpest rise since February
Global equity are higher except France: Dow +1.14%, S&P 500 +0.71%, FTSE +0.33%, DAX +0.34%, CAC -0.06%, Nikkei +0.38%, Shanghai +0.03%.
Gold prices are down 0.1% currently trading at $1,296 an ounce. WTI Crude Oil prices are fell 1.1% trading at $64.79 a barrel.
The NZDUSD opens at 0.7024 (mid-rate) this morning.
The GBP is the strongest performing of the G10 currencies surging higher after better-than-expected UK service sector PMI.
The Survey data from IHS Markit showed the UK service sector activity expanded at its fastest pace in three months in May. The index which printed at 52.8 in April and was expected to edge up to 53.0 in May spiked to 54.0.
The AUD is down against all its major rivals with the move lower coming on the back of yesterday afternoonâ€™s RBA monetary policy statement.As widely expected the RBA left its key interest rate unchanged at 1.5%, with RBA Gov Phillip Lowe confirming the bank is committed to keeping rates low as they are â€œcontinuing to support the Australian economy.â€ The RBA also believe â€œfurther progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual.
The latest GDT auction concluded earlier this morning with the overall price index down 1.3%. A total of 21,580MT of product sold under the hammer with the Butter Milk Powder index the standout performer, up 17.7%. The Whole Milk Powder Index edged down 1.1% with an average price of US$3,205/MT.
The US service sector grew at a faster than expected rate in the month of May with the ISM non-manufacturing index rising to 58.6 in May, up from 56.8 in April and ahead of the forecast 57.5 reading.
Direction for the NZDAUD will be driven by this morningâ€™s Q1 GDP data release with expectations of a 0.9% increase on the quarter which would see growth of 2.8% on an annual basis.
Global equity are mixed- Dow -0.06%, S&P 500 +0.07%, FTSE -0.70%, DAX +0.13%, CAC -0.22%, Nikkei +0.28%, Shanghai +0.74%.
Gold prices are inching higher, up 0.4% trading at $1,297 an ounce. WTI Crude Oil prices are bouncing back up 1.2% trading at $65.48 a barrel.
The NZDUSD opens at 0.7030 (mid-rate) this morning.
Risk appetite is on the rise as political tensions in Italy ease. The news that a revived coalition deal between two anti-establishment parties has succeeded in forming a government has seen equity markets and risk linked currencies push higher.
Despite exceptionally strong jobs data out of the US on Friday fears that the US will carry out its threat to impose tariffs on China after the weekendâ€™s trade talks ended without a breakthrough has seen the USD give ground against all its trading partners.
This morning's Euro-zone data was weaker than expected with producer price inflation printing at 2% in April following a 2.1% print in May and below the forecast 2.4% result. Euro-zone investor sentiment is down sharply in June with think tank Sentix reporting its investor confidence index fell to 9.3 in June from 19.2 in May. The index was expected to dip to 19.0.
US factory orders fell by 0.8% in April after surging by an upwardly revised 1.7% in March. Orders were forecast to fall by 0.5% after the previously reported 1.6% rise in March.
The only data of note during our trading day is the RBA monetary policy statement which is expected to hold few surprises.
Global equity are broadly higher- Dow +0.61%, S&P 500 +0.45%, FTSE +0.51%, DAX +0.37%, CAC +0.14%, Nikkei +1.37%, Shanghai +0.52%.
Gold prices have edged lower, trading at $1,292 an ounce. WTI Crude Oil prices are down 2.0%, trading at $64.68 a barrel.
The NZDUSD opens at 0.7000 (mid-rate) this morning.
Trading was mixed overnight and most of the major currencies failed to make any meaningful moves. Market participants seem to be biding their time ahead of tonight's much anticipated monthly jobs report out of the US, and awaiting further direction from US Treasury markets following a lackluster session.
The Canadian Dollar was the big mover, and despite printing a better than expected GDP number at 0.3% vs 0.2% expected (month on month), was sold-off sharply and ends the day down 0.6% against the US Dollar. The sell-off in CAD follows continued weakness in oil prices, and stern words from Justin Trudeau, Canada's Prime minister, saying the new US steel and aluminum tariffs are totally unacceptable, and that Canada will retaliate.
U.S. economic data was better than expected for the most part, however had a relatively muted impact on financial markets. The USD put in a mixed performance against the majors, and US equities finish the session lower. Core PCE Price Index, Personal Spending, Unemployment Claims and Chicago PMI all printed numbers slightly better than economists had forecasted, while Pending Home Sales were lower than expected for the month.
Oil prices remain on the back foot after being sold aggressively earlier in the week, despite Crude Oil Inventory numbers coming in lower than expected at -3.6M barrels, vs the -0.4M decline forecasted.
Overnight data tonight includes the US Non-Farm Payrolls, Unemployment Rate, Average Hourly Earnings and ISM Manufacturing PMI. There is little of interest elsewhere, aside from Manufacturing MPI numbers out of the UK.
Global equities: Dow -1.0%, S&P 500 -0.6%, FTSE -0.15%, DAX -1.1%, CAC -0.3%, Nikkei -0.8%, Shanghai +1.3%.
Gold prices are slightly lower at $1,299 an ounce. WTI Crude Oilremains offered, trading at 66.98 a barrel and down 1.8% for the session.
The NZDUSD opens at 0.6895 (mid-rate) this morning.
Risk on the back of geopolitical uncertainty has led to a sharp fall in both equities and risk linked currencies.
As the UK and US markets opened for the first time this week, reaction to the political turmoil in Italy and to a lesser extent Spain was both swift and severe with global equity markets opening sharply lower as investors flocked to safe havens.
The 10-year US Treasury yield is trading at 2.797% down close to 30 basis points from last weekâ€™s high of 3.08%. at the same time Italyâ€™s 2-year yield which earlier this month traded at negative 33 basis points spiked to 2.82%, its highest level since 2012.
The EUR continues to fall against all its counterparts with news that Spanish Prime Minister Mariano Rajoy is facing a vote of confidence on Friday adding further downward pressure on the currency.
Earlier this morning the US consumer confidence report for the month of May increased, recording a reading of 128.0 up from 125.6 in April and just shy of the forecast 128.6 reading.
This morningâ€™s publication of the of the RBNZâ€™s financial stability report, followed by a speech from RBNZ Gov Adrian Orr will be the key drivers for the NZD today.
Global equity are a sea of red- Dow -1.89%, S&P 500 -1.50%, FTSE -1.26%, DAX -1.53%, CAC -1.29%, Nikkei -0.55%, Shanghai -0.47%.
Gold prices have pushed higher, up 0.5% trading at $1,303 an ounce. WTI Crude Oil prices are holding steady at $66.45 a barrel.
The NZDUSD opens at 0.6938 (mid-rate) this morning.
Trading has so far been fairly subdued with volumes well down amid holidays in both the UK and the US.
Geopolitical news has dominated markets over the past 24hrs, the EUR gapped higher on the open yesterday morning and continued to outperform during our trading day, however following the news that Italian President Mattarella had chosen Carlo Cottarelli as an interim PM the move was quickly reversed. Fears that a snap election is now likely and that the anti-establishment 5-Star Movement is considering campaigning with the far-right League has seen Italian bond yields surge higher and the EUR fall sharply.
Crude oil prices are now trading at 3-week lows down another 2% overnight as Saudi Arabia and Russia consider increasing output, while US production gains show no signs of slowing.
With very little in the way of economic data investors will look to NZâ€™s bi-annual Financial Stability Report and an accompanying speech from Reserve Bank of New Zealand chairman Adrian Orr for direction.
Global equity have fallen sharply- Dow - Closed, S&P 500 - Closed, FTSE - Closed, DAX -0.58%, CAC -0.61%, Nikkei +0.13%, Shanghai -0.20%.
Gold prices have edged lower, down 0.3% trading at $1,297 an ounce. WTI Crude Oil prices continue to fall down 2.0% trading at $66.41 a barrel.
The NZDUSD opens at 0.6919 (mid-rate) this morning.
Renewed risk-off sentiment hit markets yesterday afternoon after Donald Trump tweeted that he was not happy with the China trade negotiations so far, despite China reducing import tariffs on autos, and that there was a â€œsubstantial chanceâ€ that the proposed summit with North Korea in June "would not work out". European equity markets along with the EUR have been the worst affected with uncertainty over the political situation in Italy weakening sentiment in the region further.
UK inflation disappointed with the Office for National Statistics reporting consumer prices climbed 2.4% y/y in April. The result was short of the expected 2.5% rise and is the slowest pace in 13mths.
Euro-zone private sector growth slowed for the fourth consecutive month with the flash survey for May falling to an 18mth low of 54.1 from Aprilâ€™s final reading of 55.1. The index was expected to remain unchanged.
This morningâ€™s FOMC minutes have been deemed to be slightly dovish with both the USD and treasury yields falling following the release. Although the Fed all but confirmed that they will hike rates in June followed by another in September commenting that â€œit would likely soon be appropriate for the Committee to take another step in removing policy accommodation,â€ they went on to state that â€œthey will tolerate above-target price growth for the foreseeable future as â€˜a temporary period of inflation modestly above 2 percent would be consistent with the Committee's symmetric inflation objective and could be helpful in anchoring longer-run inflation expectations at a level consistent with that objective,â€ denting hopes of a possible fourth hike this year.
Global equity have fallen sharply- Dow -0.27%, S&P 500 -0.23%, FTSE -1.13%, DAX -1.47%, CAC -1.32%, Nikkei -1.18%, Shanghai -1.41%.
Gold prices are unchanged trading at $1,292 an ounce. WTI Crude Oil prices are down 1.0% trading at $71.55 a barrel.
The NZDUSD opens at 0.6932 (mid-rate) this morning.
Currency markets have consolidated with a lack of economic data keeping investors on the side lines.
Commodity-linked currencies pushed higher yesterday afternoon but have since retraced the move after China announced it was reducing tariffs on imported cars from 25% to 13.8%. The reductions will take effect on July 1st with German and Japanese car manufacturers set to benefit the most.
The British Pound strengthened after the Bank of England Governor Mark Carney said interest rates are set to rise at a gentle pace and the slowdown seen in the first quarter was temporary. His comments were echoed by BoE policy maker Gertjan Vlieghe who said interest rates are likely to rise by 25 to 50 basis points every year over a three-year forecast period, bringing policy rate closer to neutral.
The UK Office for National Statistics reported the UK budget deficit narrowed in April with public sector net borrowing, excluding public sector banks, decreasing by GBP 1.6b to GBP 7.8b. this is the lowest net borrowing in 10yrs.
With very little in the way of economic data during our trading day investors are likely to await tonightâ€™s UK inflation report along with tomorrow morningâ€™s FOMC meeting minutes before adding to their positions.
Global equity are mixed- Dow -0.27%, S&P 500 -0.01%, FTSE +0.23%, DAX +0.71%, CAC +0.05%, Nikkei -0.18%, Shanghai +0.02%.
Gold prices are unchanged trading at $1,292 an ounce. WTI Crude Oil prices are holding steady trading at $72.24 a barrel.
The NZDUSD opens at 0.6941 (mid-rate) this morning.
Geopolitical risked eased yesterday with markets responding positively to the news that the US and China have agreed to drop tariff threats and work together on a wider agreement.
Global equity markets along with risk linked currencies have moved to the upside with the AUD the strongest performing of the G10 currencies.
The NZD failed to keep track with the AUD with yesterdayâ€™s disappointing retail sales report weighing on the dollar. Q1 retail sales increased just 0.1% well below the expected 1.0% growth, with Q4â€™s previously reported 1.7% increase downwardly revised to 1.4%.
The British Pound is under pressure as investors trim their long GBP positions ahead of Wednesday nightâ€™s inflation report. Traders remain wary after last monthâ€™s report showed UK inflation fell at a much faster rate than expected, from 2.7% to 2.5%, prompting the BOE to cut its inflation forecasts.
Global equity are broadly higher- Dow +1.17%, S&P 500 +0.77%, FTSE +1.03%, DAX Closed%, CAC +0.41%, Nikkei +0.31%, Shanghai +0.64%.
Gold prices are unchanged trading at $1,292 an ounce. WTI Crude Oil prices have pushed higher, up 1.3% trading at $71.37 a barrel.
The NZDUSD opens at 0.6919 (mid-rate) this morning.The NZD had a positive close to the week, rising against all its major rivals and closing back above 69 US cents as US Treasury yields pulled back from 7-year highs. After spiking to 3.109 late on Thursday, yield on the ten-year note fell 4.2 basis points on Friday closing out the week at 3.067% The ECB reported its current account surplus declined for the second consecutive month and now sits at its lowest level in 9-months. The current account surplus fell to a seasonally adjusted EUR 32.0B in March from EUR 36.8B in February. The CAD was the worst performing of the G10 currencies on Friday following disappointing economic data. Fridayâ€™s inflation data showed the consumer price index rising at an annual pace of 2.2% in April, down from 2.3% in March and below the expected unchanged result. News that China and the US are â€œputting the trade war on holdâ€ came after markets had closed for the week and should have a positive effect on equity markets this morning. The US announced they wonâ€™t impose tariffs on Chinese products for now, after China proposed to â€œsignificantly increase purchasesâ€ of U.S. goods. This main focus for local investors this morning will be NZâ€™s quarterly retail sales report, with economists expecting a 1% increase in Q1 following on from Q4â€™s 1.7% rise. Global equity markets finished the week mixed, - Dow +0.00%, S&P 500 -0.26%, FTSE -0.12%, DAX -0.28%, CAC -0.13%, Nikkei +0.40%, Shanghai +1.24%. Gold prices edged higher on Friday up 0.1%, closing out the week at $1,292 an ounce. WTI Crude Oil prices inched lower on Friday, down 0.3% to close out the week at $71.37 a barrel, having gained 1.0% on the week.
The NZDUSD opens at 0.6896 (mid-rate) this morning.
The Kiwi has managed to recover some ground overnight, after setting new lows around 0.6850 in the current down-trend.
The commodity currencies on the whole were the best performers across the majors, despite some geopolitical uncertainty surrounding North Korea. U.S. equity markets rose modestly, and treasury markets finished the day unchanged after showing early strength.
In a statement issued by the state-run Korean Central New Agency, North Korean First Vice Minister of Foreign Affairs Kim Kye Gwan suggested Trump must accept the communist party as a nuclear power. Kim pointed to "unbridled remarks" by U.S. officials, which call on North Korea to abandon nuclear weapons first, and be compensated afterward, and threatened to withdraw from an historic meeting planned between leader Kim Jong Un and President Donald Trump.
U.S. economic data was mixed overnight, with Building Permits coming in on expectation at +1.35M, Housing Starts below expectations at 1.29M vs 1.32M expectation, and Industrial production climbing by 0.7% in April, higher than the 0.6% rise forecasted by economists.
Oil prices remain elevated, finishing the day higher with Crude Inventories coming in lower than the market had expected at -1.4M barrels, vs the forecasted decline of -1.1M barrels.
Overnight data tonight includes US Philly Fed Manufacturing Index, and US Unemployment Claims.
Global equities: Dow +0.1%, S&P 500 +0.3%, FTSE +0.2%, DAX -+0.2%, CAC +0.3%, Nikkei -0.4%, Shanghai -0.1%.
Gold prices are unchanged overnight at $1,288 an ounce. WTI Crude Oil prices continue to push higher, up 0.25% trading at $71.50 a barrel.
The NZDUSD opens at 0.6857 (mid-rate) this morning.
The USD outperformed overnight as Bond prices fell and Treasury yields spiked higher, following solid economic data releases out of the US.
The US Commerce Department retail sales report showed both retail sales and core retail sales (excluding automobiles) increased by 0.3% in the month of April following Marchâ€™s upwardly revised respective 0.8% and 0.4% increases.
The Empire State manufacturing index jumped to 20.1 in May following a 15.8 reading in April and well ahead of the projected 15.0 result.
Home builder confidence in the US unexpectedly increased in May with NAHB/Wells Fargo Housing Market Index rising to 70 following a downwardly revised 68 reading in April. The index had been expected to remain unchanged from the previously reported 69 reading in April.
The US 10-year Treasury yield spiked to 3.09%, its highest level since 2011, while yield on the US 2-year note hit a high of 2.589 percent, its highest level since August 11, 2008.
The EUR came under pressure against the majors following weaker than expected economic data releases, with Eurostat reporting gross domestic product in the Euro-zone region grew 0.4% in Q1 slower than the 0.7% increase seen in Q4 2017.
Weak trade data has seen Germany's economic growth halved in Q1 with the Destatis report showing GDP grew at 0.3% in Q1 following Q4â€™s 0.6% expansion.
Strong jobs growth in the UK which has pushed the UKâ€™s employment rate to a fresh record in the first three months of 2018 has failed to push up wage growth. The Office for national Statistics reported employment rose by 0.4 points to 75.6% in the latest quarter, the highest since modern records began in 1971, but wage growth for the same quarter increased by 2.6% on a year earlier, slower than the annual rise of 2.8% recorded in the three months to February, and short of the forecast 2.7% increase.
Global equity remain are mixed- Dow -0.75%, S&P 500 -0.87%, FTSE +0.16%, DAX -0.06%, CAC +0.23%, Nikkei -0.21%, Shanghai +0.57%.
Gold prices are sharply lower, down 1.9% trading at $1,288 an ounce. WTI Crude Oil prices have pushed higher, up 0.9% trading at $71.31 a barrel.
The NZDUSD opens at 0.6915 (mid-rate) this morning.
In the absence of any notable economic data releases currency markets have had a slow start to the week with the NZD the notable underperformer.
The NZD has been on the back foot since Thursdayâ€™s dovish Reserve Bank statement and has been unable to sustain any sort of rally.
The EUR received a boost overnight after European Central Bank policy maker Francois Villeroy de Galhau signalled that he expects bond purchases to end later this year and that the ECB could expect to hike rates in 2019. In an interview in Paris, the French central banker announced that inflation should accelerate in the coming months as underlying price pressures increase.
Direction during our trading day will be dictated by this afternoonâ€™s China retail sales and industrial production data releases, while overnight tonight investors will look to the US retail sales before adding to their portfolios.
Global equity markets are mixed- Dow +0.25%, S&P 500 -0.04%, FTSE -0.18%, DAX -0.18%, CAC -0.02%, Nikkei +0.47%, Shanghai +0.34%.
Gold prices are little changed trading at $1,313 an ounce. WTI Crude Oil prices have edged higher, up 0.3% trading at $70.69 a barrel.
The NZDUSD opens unchanged at 0.6966 (mid-rate) this morning.
The Kiwi remains the worst performing of the G10 currencies since Friday morning, in relatively quiet trade.
Overnight on Twitter U.S. President Trump announced he has instructed the Commerce Department to reverse its sanctions on Chinaâ€™s ZTE, which can be taken as a key concession in the trade negotiations.
U.S. University of Michigan Consumer Sentiment was modestly better than the market expectation for 98.5 in May with a reading of 98.8
Canadian Employment rate remained unchanged in April at 5.8%, and the Employment Change fell by 1,100 jobs when 17,800 was expected, from 32,300 in March
This weekâ€™s data releases for New Zealand include Global Dairy Auction Wednesday, Producer Price Index and Annual Budget on Thursday
Global equity markets are all higher: Dow +0.37%, S&P 500 +0.17%, FTSE +0.31%, DAX -0.17%, CAC -0.07%, Nikkei +1.16%, Shanghai -0.35%.
Gold prices are down 0.5% or $7 to $1,314 an ounce. WTI Crude Oil prices have fallen 1.4% trading at $70.45 a barrel.
The NZDUSD opens at 0.6966 (mid-rate) this morning.
The Kiwi is the worst performing of the G10 currencies in the past 24 hours after then new RBNZ Governor, Adrian Orrâ€™s first Monetary Policy Statement and Press Conference, yesterday morning.
The RBNZ left the Official Cash Rate at 1.75% and stated that Monetary Policy will remain accommodative for a "considerable period"
U.S. Initial Claims for unemployment benefits were unchanged at a seasonally adjusted 211,000 for the week ending 5thMay. Expectation was for a rise to 218,000, but the 211k is still juxtaposed to the 209k recorded on April 21 2018, which was the lowest level since December 1969
U.S. Consumer Price Index increased by 0.2% in April on a seasonally adjusted basis after falling 0.1% in March, behind expectation for a 0.3% rise.
The U.S. Fed tries to keep Inflation close to its 2% target by influencing labour market conditions via interest rates, and services prices tend to be more sensitive to the labour market than goods prices. U.S. Service prices excluding energy rose 2.9% in the year through to April, however after Rents are removed they were only up 2.3%, which was little changed from March. This removes the risk that the Fed will increase the pace of interest rate hikes, as they donâ€™t see an overheating market.
The Bank of England Monetary Policy Committee held rates at 0.5% by a 7-2 majority. The MPC voted unanimously to maintain the stock of corporate and government bond purchases. The Q1 slowdown in economic growth put the kibosh on the case for higher borrowing costs. The BOE expects the U.K. economy to grow by 1.4% in 2018 downgrading its previous expectation of 1.8% which was slightly above the market expectation.
Global equity markets are all higher: Dow +0.79%, S&P 500 +0.85%, FTSE +0.50%, DAX +0.62%, CAC +0.20%, Nikkei +0.39%, Shanghai +0.48%.
Gold prices are up 0.7% to $1,321 an ounce. WTI Crude Oil prices have continued to rally currently up 0.4% trading at $71.44 a barrel.
The NZDUSD opens at 0.6985 (mid-rate) this morning.
The CAD is the best performing of the G10 currencies as crude oil prices rebound from yesterdayâ€™s fall, breaking up through $71.00 a barrel.
Another rise in US Treasury bond yields has seen the Japanese Yen under perform with USD/JPY threatening to break up through the key 110.00 psychological mark.
The yield on the two-year Treasury note hit 2.53% its highest since September 2009, while the yield on the 10-year Treasury note continues to hover around the 3% mark despite soft overnight US economic data.
US producer prices in the month of April inched up by 0.1% following on from Marchâ€™s 0.3% rise and short of expectations of a 0.2% increase. Wholesale inventories increased by 0.3% in March after climbing by 0.9% in February, economists had forest inventories to to increase by 0.5%.
The RBNZ have maintained the Official Cash Rate (OCR) at 1.75%. This was widely expected. The NZD is lower in immediate response.
Global equity markets are mixed- Dow +0.77%, S&P 500 +1.02%, FTSE +1.08%, DAX +0.24%, CAC +0.23%, Nikkei -0.44%, Shanghai -0.07%.
old prices have edged lower, down 0.2% to $1,312 an ounce. WTI Crude Oil prices have rebounded from yesterdayâ€™s fall currently up 2% trading at $71.12 a barrel.
The NZDUSD opens at 0.7018 (mid-rate) this morning.
Currencies have been somewhat side-lined as global equity markets and oil prices push higher.
Positive corporate earnings along with the weekends US jobs data have seen major averages push higher. Oil prices are back above USD $70 a barrel for the first time since November 2014. Surplus oil stocks have been steadily declining since the OPEC cartel cut production and with President Trump threatening to re-impose sanctions to reduce Iranian oil exports prices have risen sharply.
Overnight Euro-zone economic data disappointed with investor confidence weakening for the fourth consecutive month and German factory orders unexpectedly declining in the month of March.
The Sentix investor sentiment index fell unexpectedly to 19.2 in May from 19.6 in April. Economists had expected the index to rise to 22.4.
German factory orders declined 0.9% m/m in March following on from a downwardly revised 0.2% fall in February, once again this came as a surprise to economists who had predicted orders to increase by 0.5% following three consecutive monthly falls.
The key driver for the NZD during our trading data will be this afternoonâ€™s RBNZ quarterly inflation expectations due for release at 15:00.
Global equity markets broadly higher- Dow +0.67%, S&P 500 +0.61%, FTSE Closed, DAX +1.00%, CAC +0.28%, Nikkei -0.03%, Shanghai +1.48%.
Gold prices are unchanged trading at $1,314 an ounce. WTI Crude Oil prices have broken up through $70 a barrel overnight currently trading at $70.63 a barrel.
The NZDUSD opens at 0.7025 (mid-rate) this morning.
Fridayâ€™s US employment data sent mixed signals to the market with the USD posting modest gains against all its rivals.
The US Labour Department reported the non-farm payroll employment climbed by 164K jobs in April well below economistâ€™s estimates of an increase of 192k jobs, while at the same time the unemployment rate fell to 3.9% after holding steady at 4.1% for the past six months. Economists had expected the rate to edge down to 4.0%.
Euro-zone economic activity continues to expand at a reasonable pace IHS Markit reporting its composite output index inched down to 55.1 in April following on from Marchâ€™s 55.2 reading. A reading above 50.0 signals expansion.
Euro-zone retail sales disappointed with data from Eurostat showing retail sales inched up 0.1% m/m in March, following a 0.3% increase in February and well below the forecast 0.5% increase.
The key domestic drivers for the NZD this week will be tomorrowâ€™s quarterly Inflation Expectations and Thursday morningâ€™s RBNZ monetary policy statement.
Global equity markets finished the week mixed, - Dow +1.39%, S&P 500 +1.28%, FTSE +0.86%, DAX +1.02%, CAC +0.26%, Nikkei -0.16%, Shanghai -0.32%.
Gold prices edged higher on Friday up 0.1%, closing out the week at $1,321 an ounce down 0.7% on the week. WTI Crude Oilprices pushed higher on Friday, up 1.6% to close out the week at $69.72 a barrel, having gained 1.9% on the week.
The NZDUSD opens at 0.7043 (mid-rate) this morning.The Kiwi is the best performer of the G10 currencies as the USD lost ground after yesterday morningâ€™s Fed announcement underwhelmed the market.
The NZDUSD has traded a 106 point or 1.50% range this weekfalling from Mondayâ€™s high of 0.7089 to a 0.6983 low on Wednesday. Thursdayâ€™s bullish, overbearing daily candle combined with a close back above 0.7000 suggests a retracement higher is likely on a correctional basis to 0.7150. This is underpinned by the Relative Strength Index retracing from a low of 26 to be at 35 (back above the 30 oversold indicator) and moving higher. The 200 moving day average is at 0.7166.
In the week ending April 28, the advance figure for seasonally adjusted U.S. Initial Claims was 211,000, an increase of 2,000 from the previous week's unrevised level of 209,000. The 4-week moving average was 221,500, a decrease of 7,750 from the previous week. This is the lowest level for this average since March 3, 1973 when it was 221,250.
The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced overnight that the goods and services deficit was $49.0 billion in March, down $8.8 billion from $57.7 billion in February, revised. March exports were $208.5 billion, $4.2 billion more than February exports. March imports were $257.5 billion, $4.6 billion less than February imports. Year-to-date, the goods and services deficit increased $25.5 billion, or 18.5%
Canada's merchandise trade deficit with the world widened from $2.9 billion in February to a record $4.1 billion in March. Canada's imports rose 6.0% to a record $51.7 billion in March. Exports also increased, up 3.7% to $47.6 billion.
Economic activity in the U.S. Non-Manufacturing sector grew in April for the 99th consecutive month, say the nationâ€™s purchasing and supply executives in the latest Non-Manufacturing ISMÂ® Report On Business. NMIÂ® registered 56.8%, down 2% from March.
The U.S. Non-Manufacturing Business Activity Index decreased to 59.1% down from 60.6% in March reflecting growth for the 105th consecutive month. New Orders Index at 60% from 56.6% in March. Employment Index at 53.6% from 56.6% in March. The respondents have expressed concern regarding the uncertainty about tariffs and the effect on the cost of goods. Overall, the respondents remain positive about business conditions and the economy.
Overnight data tonight includes U.S. Unemployment rate, U.S. Non-Farm Employment Change, U.S. Average Hourly Earnings and four FOMC Members speaking. Euro area PMI and Retail Sales; and German, French, Italian and Spanish PMI.
Global equity markets are mainly lower: Dow +0.05%, S&P 500 -0.18%, FTSE -0.54%, DAX -0.88%, CAC -0.50%, Nikkei closed, Shanghai +0.64%.
Gold prices are modestly higher 0.1%, trading at $1,313 an ounce. WTI Crude Oil prices are up another 1.0% overnight currently trading at $68.48 a barrel.
The NZDUSD opens at 0.6995 (mid-rate) this morning.
The USD continues to climb ahead of tomorrow morning's FOMC monetary policy statement. The US Dollar index (DXY) which measures the value of the USD against a basket of currencies, is threatening to break up through its 2018 high of 92.64, peaking earlier this morning at 92.57.
The USD pulled back from its highs after this morningâ€™s US economic data releases disappointed. The ISM reported its Purchasing Managers' Index dropped to 57.3 in April from 59.3 in March. Economists had expected the index to inch down to 58.3. Construction spending confounded economists who had forecast spending to increase by 0.5% in March, with the Commerce Department reporting spending fell by 1.7% to an annual rate of $1.285 trillion.
The GBP is the worst performing of the G10 currencies as once again their economic data disappointed. Last night survey data from IHS Markit showed UK manufacturing activity expanded at the slowest pace in 17 months in April. The Purchasing Managers' Index which had been expected to edge down to 54.8 from a 5.9 reading in March plummeted to 53.9 leading to a sharp fall in the pound.
Yesterdayâ€™s RBA monetary policy statement held few surprises and as such has had little effect on the NZDAUD cross rate. The key driver for the NZD will be this morningâ€™s quarterly employment report. Economists are forecasting unemployment to edge down to 4.4% from 4.5% in Q4, while the Labour Cost Index is expected to inch up by 0.5% following a 0.4% increase in Q4.
Tomorrow mornings FOMC statement will be released at 6:00am.
Global equity markets are mixed- Dow -0.65%, S&P 500 -0.20%, FTSE +0.15%, DAX Closed CAC Closed, Nikkei +0.18%, Shanghai +0.23%.
Gold prices are down 1.0%, trading at $1,305 an ounce. WTI Crude Oil prices are sharply lower down 2.2% overnight currently trading at $67.14 a barrel.
The NZDUSD opens at 0.7039 (mid-rate) this morning.
The USD strengthened further overnight as the Core PCE index, the Federal Reserveâ€™s preferred inflation measure, printed in line with economistsâ€™ forecasts. Consumer prices as measured by the personal consumption expenditures increased 2.0% y/y in March, its largest gain since February 2017, and follows on from a 1.7% rise in February 2018.
The US Commerce Department reported personal income rose by 0.3% in March just shy of the forecast 0.4% increase while personal spending increased by 0.4% for the same month, matching economists' estimates.
Germany's retail sales unexpectedly declined in March, with Destatis reporting sales fell 0.6% m/m in March confounding economists who had expected sales to increase by 0.8%. The negative report was countered by Germany's consumer price inflation which rose 1.6% y/y in April, matching the March result. Economists had forecast the rate to drop to 1.5%.
The NZDAUD cross rate will be dictated by the tone of this afternoons RBA rate statement. The RBA which recently signalled to the market that the next move in interest rates was likely to be a hike, will have been disappointed by last weekâ€™s Q1 inflation report which fell short of expectations, and has dampened investor hopes of a â€œhawkishâ€ statement.
Global equity markets are mixed- Dow -0.21%, S&P 500 -0.51%, FTSE +0.09%, DAX +0.25%, CAC +0.68%, Nikkei Closed, Shanghai Closed.
Gold prices are little changed, down 0.2%, trading at $1,318 an ounce. WTI Crude Oil prices are up 1% overnight currently trading at $68.65 a barrel.
The NZDUSD opens at 0.7082 (mid-rate) this morning.
US economic growth continues to slow, but not as fast as economists had predicted. On Friday the Commerce Department announced GDP increased by 2.3% in Q1 following on from a 2.9% jump in Q4. Economists had forecast Q1 GDP to slow to 2.0%.
Consumer Sentiment in the US deteriorated by less than initially forecast in the month of April, with the University of Michigan reporting their sentiment index fell to 98.8 in April after recording a reading of 101.4 in March. Earlier in the month economists had predicted the index to fall to 98.0.
The British Pound weakened further on Friday after both Q1 GDP and consumer sentiment fell short of economistsâ€™ forecasts. The Office for National Statistics reported Gross domestic product grew only 0.1% in Q1 after expanding 0.4% in Q4. GDP had been expected to rise by 0.3%, while the consumer sentiment index, which had been expected to remain at -7 fell to -9 in April.
The main domestic driver for the NZD this week will be Wednesdayâ€™s quarterly employment report while on the international front both the RBA and the Federal Reserve are expected to keep their OCRâ€™s unchanged with the tone of their statements set to dictate direction.
Global equity markets with the exception of the Dow pushed higher on Friday, - Dow -0.05%, S&P 500 -0.11%, FTSE +1.09%, DAX +0.64%, CAC +0.54%, Nikkei +0.66%, Shanghai +0.23%.
Gold prices edged higher on Friday up 0.4%, closing out the week at $1,321 an ounce down 1.1% on the week. WTI Crude Oilprices inched lower on Friday, down 0.4% to close out the week at $67.98 a barrel.
The NZDUSD opens at 0.7148 (mid-rate) this morning.
Commodity currencies including the NZD have declined amid broad USD strength on the back of rising US bond yields. The 10-Year US Treasury note threatened to break through 3% overnight topping out at 2.996%, its highest level in four years.
This morning the National Association of Realtors (NAR) reported existing home sales in the US increased well ahead of expectations in the month of March. Following on from a 3.0% increase in sales in February, NAR announced sales were up a further 1.1% in March. Economists had expected existing home sales to inch up by 0.2%
There was better news for the EUR overnight with results from IHS Markit showing both French and German private sector growth expanded at a faster pace than forecast in April. Franceâ€™s composite output index rose to 56.9 in April from 56.3 in March (exp 55.9) while Germanyâ€™s unexpectedly increased to 55.3 in April up from 55.1 in March (exp 54.8)
The highlight of our trading day ahead of tomorrowâ€™s ANZAC day holiday will be the Australian quarterly inflation data release due out at 13:30. Economists are forecasting CPI to increase by 0.5%, with the trimmed mean (excludes the most volatile 30% of items) also expected to increase by 0.5%.
Global equity markets remain mixed- Dow -0.25%, S&P 500 -0.22%, FTSE +0.42%, DAX +0.25%, CAC +0.48%, Nikkei -0.33%, Shanghai -0.11%
Gold prices are down 0.8%, trading at $1,323 an ounce. WTI Crude Oil prices are holding steady at $68.27 a barrel.
The NZDUSD opens at 0.7215 (mid-rate) this morning.
The USD outperformed on Friday as US treasuries extended their move to the downside. Yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.7 basis points to 2.951% on Friday and now sits at four-year highs, as investors position their books for further interest rate hikes.
After hitting a 14-month low of 1.8% in February, Germanyâ€™s producer price inflation inched up to 1.95 in March. This was the first rise in six months. Economists had forecast the index to rise to 2.0%.
The British pound extended its fall on Friday after Bank of England Governor Mark Carney acknowledged that the recent economic data had been soft and that â€œBrexit uncertainty acts as a dampener to a pickup in business development.â€ Mr Carney went on to say that although an interest rate hike is â€œlikelyâ€ this year economic decisions over the course of the next few years would depend upon the deal that the UK reach with the EU.
There is very little in the way of domestic data this week, while on the international front monetary policy statements out of both the ECB and the BOJ along with advanced Q1 GDP out of the US will be the main focus for investors.
Global equity markets closed out the week mixed on Friday, - Dow -0.82%, S&P 500 -0.85%, FTSE +0.54%, DAX -0.21%, CAC +0.39%, Nikkei -0.13%, Shanghai -1.47%.
Gold prices slipped lower on Friday down 0.7%, closing out the week at $1,334 an ounce, WTI Crude Oil prices spiked to $70 a barrel on Friday, but retraced the move after President Trump blasted OPEC for trying to artificially boost prices.
The NZDUSD opens at 0.7268 (mid-rate) this morning.
A combination of broad USD strength along with a pull pack in our annualised inflation has seen the NZD underperform overnight.
The GBP is the worst performing of the G10 currencies with weaker than expected retail sales adding further downward pressure on the currency following a disappointing inflation report. Retail sales for the month of March fell 1.2% m/m after increasing 0.8% in February. Sales were expected to decline by 0.6%.
US economic data releases with the exception of the Philadelphia manufacturing index printed in line with expectations. The Philly Fed reported its manufacturing index edged higher with a reading of 23.2 in April up from 22.3 in March. Economists had expected the index to fall to 20.1.
US equity markets are down and bond prices are under pressure as yield on the ten-year note increased to 2.914%, up 4.7 basis points. This is the highest closing level in almost two months when yields hit a multi-year high.
A lack of economic data during our trading day should see currencies trade tight ranges heading into the weekend.
Global equity markets are mixed - Dow -0.43%, S&P 500 -0.77%, FTSE +0.16%, DAX -0.19%, CAC +0.21%, Nikkei +0.15%, Shanghai +0.84%.
Gold prices have edged lower, down 0.2% trading at $1,344 an ounce. WTI Crude Oil prices are back at $68.25 a barrel, having spiked as high as $69.50 overnight.
The NZDUSD opens at 0.7321 (mid-rate) this morning.
All eyes this morning will be our Q1 inflation report due to hit the tapes at 10:45am. Markets are forecasting for inflation to rise 0.4% up from 0.1% in Q4. More importantly the annualised rate of inflation is expected to fall from 1.6% to 1.1% for the first quarter. Although the fall is likely to be largely due to changes to the tertiary education fees by the Labour Government, the RBNZ will not like to see inflation so close to the bottom end of its 1% to 3% target.
The GBP underperformed with the Office for National Statistics reporting inflation in the UK slowed to a one year-low in March. Inflation which had been forecast to remain unchanged at 2.7% pulled back to 2.5% its lowest level since March 2017. Core inflation which excludes food, energy, alcohol and tobacco also slowed to 2.3% down from 2.4% in February.
As widely expected the Bank of Canada held its interest rate at 1.25%, but with the Governing Council announcing that it remained "cautious with respect to future policy adjustments," the CAD came under pressure. BOC governor Stephen Poloz went on to say that the bank will be guided by incoming data and that although higher interest rates will be warranted over time, â€œsome monetary policy accommodation will still be needed to keep inflation on target."
Further direction for the NZD AUD cross rate will be driven by this afternoonâ€™s Australian report. Forecasts are for the Australian economy to have added 20,300 new jobs during the March month with unemployment to tick down to 5.5% from 5.6%
Global equity markets push higher - Dow +0.05%, S&P 500 +0.05%, FTSE +1.26%, DAX +0.04%, CAC +0.50%, Nikkei +1.42%, Shanghai +0.80%.
Gold prices are little changed, trading at $1,350 an ounce. WTI Crude Oil prices have rebounded, down 2.9% to $68.21 a barrel.
The NZDUSD opens at 0.7342 (mid-rate) this morning.
Global equity markets are trending upwards with sentiment improving as tensions in Syria abate, but there has been little reaction in currency markets which continue to trade sideways.
The USD has made small gains against the majors helped higher on the back of better-than-expected housing and industrial production data releases.
The US Commerce Department released a report showing housing starts rose 1.9% in March after plunging 3.3% in February, with building permits also spiking higher, up 2.5% in March following a 4.1% fall in February.
Following on from a 1.0% lift in February, industrial production increased by 0.5% in March, just ahead of the forecast 0.4% reading.
This morningâ€™s Global Dairy Trade (GDT) auction resulted in a 2.7% increase in the index, with whole milk powder prices up 0.9% and skimmed milk powder prices rising 3.6%. A total of 19,262MT of product sold under the hammer.
German economic confidence declined sharply in April, with the ZEW Indicator of Economic Sentiment plummeting to -8.2 in April from +5.1 in March. The fall was far greater than expected, with economists predicting a score of -1.
The UK unemployment rate fell to a new all-time-low in the three months to February with the Office for National Statistics report showing unemployment now sits at 4.2% down from 4.3% in the three months to January. Average weekly earnings increased by 2.8% for the same period following a 3% rise in the three months to January. Economists had expected another 3% increase.
Once again there is very little in the way of economic data during our trading day but overnight inflation data out of the UK along with the bank of Canada monetary policy statement (the BOC are expected to keep the OCR unchanged} should prove to be the highlights.
Global equity markets are broadly higher - Dow +0.75%, S&P 500 +1.01%, FTSE +0.39%, DAX +1.57%, CAC +0.76%, Nikkei +0.06%, Shanghai -1.41%.
Gold prices are unchanged, trading at $1,347 an ounce. WTI Crude Oil prices are little changed, down 0.2% to $66.29 a barrel.
The NZDUSD opens at 0.7345 (mid-rate) this morning.
A rebound in US retail sales in March has seen US equity markets push higher but has had little effect on the currency.
Following on from three consecutive monthly declines the US Commerce Department reported retail sales rebounded in March. With auto sales leading the way sales were up 0.6%, economists had expected a 0.4% increase. Core sales which exclude automobiles, gasoline, building materials and food services increased by 0.2%, in line with expectations.
The Empire State Manufacturing Index declined more than expected in April with the New York Fed reporting the index fell to 15.8 in April down from 22.5 in March and well below the forecast 18.6 reading. The fall was brought about by decreases in both shipment and new order growth.
US homebuilder confidence edged lower in April with the National Association of Home Builders reporting the index dipped to 69, down from 70 in March. The index had been expected to remain unchanged.
Direction during our trading day will be dictated by this afternoons China GDP data release, while the RBA meeting minutes is expected to hold few surprises and should have little effect on the NZDAUD crossrate.
Global equity markets are mixed - Dow +1.00%, S&P 500 +0.94%, FTSE -0.91%, DAX -0.41%, CAC -0.04%, Nikkei +0.26%, Shanghai -1.53%.
Gold prices are little changed, trading at $1,347 an ounce. WTI Crude Oil prices have pulled back from 3-year highs, down 1.4% to $66.39 a barrel.
The NZDUSD opens at 0.7358 (mid-rate) this morning.
Markets were subdued on Friday with an absence of tier one economic data and growing concerns over the situation in Syria keeping investors on the side lines.
Markets were closed, and have so far shown little reaction to the news that the defence forces of the US, UK and France, jointly launched a military attack targeting Syria's chemical weapons capabilities.
On Friday the University of Michigan released its preliminary reading on the consumer sentiment index for April. The reading which had been expected to edge down to 100.5 from Marchâ€™s final reading of 101.4 (a fourteen year high) came in at a disappointing 97.8.
Germany's consumer price inflation printed in line with expectations, with the Destatis report showing Inflation rose to 1.6% in March up from 1.4% in February.
The domestic highlight for the NZD week will be Thursdayâ€™s quarterly inflation report, with economists currently predicting Q1 CPI will increase by 0.5% q/q.
Global equity markets closed out the week mixed on Friday, - Dow -0.50%, S&P 500 -0.28%, FTSE +0.09%, DAX +0.22%, CAC +0.11%, Nikkei +0.55%, Shanghai -0.66%.
Gold prices pushed higher on Friday up 0.7% closing out the week at $1,345 an ounce, WTI Crude Oil prices edged higher on Friday, closing out the week at $67.33 a barrel, for a weekly gain of 8%.
The NZDUSD opens at 0.7381 (mid-rate) this morning.
The Kiwi marched higher overnight against all the major currencies except the GBP, as tensions around Syria eased, and risk appetite improved.
The NZDUSD has traded a 121 point or 1.66% range this week, with a breach of 0.7400 imminent. Above that the January 24th and February 16th high of 0.7437 forms a double top and a near term resistance target. The 200 moving day average is at 0.7180
The European Central Bank Monetary Policy Makers met last month and discussed the potentially harmful impact of the Euroâ€™s strength and other risks from the U.S. trade wars, the minutes of the meeting showed.
As the ECB reduce their bond buying program, which depressed borrowing costs, kick started growth and aided the threat of deflation, investors are wondering what the full impact from the trade war with the U.S and China will be, and how that will affect the ECBâ€™s exit plan. The near 2% inflation target for the ECB will undershoot as inflation will remain weak for probably years to come.
Euro area Industrial Production unexpectedly declined for the third consecutive month, continuing the run of softer activity data from the region. Euro area Industrial Production fell 0.8%when the market was expecting an increase of 0.1%
New applications for U.S. Unemployment benefits fell last week, pointing to sustained labour market strength despite a sharp slowdown in job growth in March. U.S. Initial claims for state unemployment benefits dropped 9k to a seasonally adjusted 233k for the week ended April 7.
U.S. Import Prices were flat in March, below expectation for a 0.2% increase, and following a 0.3% increase from February. U.S. Export Prices were 0.3% higher in March after rising 0.2% in February and 0.8% in January.
Overnight data tonight includes US preliminary University of Michigan Consumer Sentiment and Inflation expectations, and Euro Trade Balance
Global equity are higher except Asia: Dow +1.48%, S&P 500 +1.04%, FTSE +0.02%, DAX -+0.98%, CAC +0.59%, Nikkei -0.12%, Shanghai -0.12%.
Gold prices are down $12 or 0.9% trading at $1,336 an ounce. WTI Crude Oil prices continue to push higher, up 0.5% trading at $67.13 a barrel.
The NZDUSD opens at 0.7358 (mid-rate) this morning.
Geopolitical tensions in the Middle East have capped risk appetite and helped push up oil prices to new 3-year highs.
Comments from President Trump saying that the US would respond to the provocation within days if not hours following the latest chemical weapons attack in Syria have overshadowed this morningâ€™s economic data releases.
New Federal Reserve Chairman Jerome Powell had his comments from last month confirmed overnight when the US inflation report failed to meet expectations. Mr Powell was quoted as saying that â€œthere are no clear signs that inflation is acceleratingâ€ and this morningâ€™s CPI data release for the month of March was testament to this.
Last night the US labour department reported consumer prices for the month of March edged down by 0.1% following a 0.2% rise in February, it is the first fall in consumer prices since May 2017. Economists had forecast consumer prices to come in unchanged.
The USD which had slipped lower following the inflation report is now retracing the move on the back of slightly â€œhawkishâ€ FOMC meeting minutes, with all participants agreeing that â€œthe outlook for the economy beyond the current quarter had strengthened in recent monthsâ€.
Both UK industrial production and manufacturing output for February disappointed. Industrial growth fell short of expectations with the Office for National Statistics report showing industrial output inched up 0.1% month on month, following on from Januaryâ€™s 1.3% increase, while manufacturing output which had been expected to increase by 0.2%, declined by 0.2%.
Global equity are broadly lower - Dow -0.50%, S&P 500 -0.15%, FTSE -0.13%, DAX -0.83%, CAC -0.56%, Nikkei -0.49%, Shanghai +0.56%.
Gold prices have pushed higher, up 0.7% trading at $1,348 an ounce. WTI Crude Oil prices continue to spike higher, up 2.1% trading at $66.81 a barrel.
The NZDUSD opens at 0.7373 (mid-rate) this morning.
Risk appetite improves as trade war concerns ease following comments from Chinese president Xi Jinping.
Late yesterday afternoon Chinese president Xi Jinping promised to open Chinaâ€™s economy further and lower import tariffs on products including cars fuelling optimism that a trade war between China and the US could be averted. Global equity markets along with commodity based currencies have rallied strongly on the news.
Producer prices in the U.S. for the month of March exceeded expectations with the Labour Department report showing the index rose by 0.3% after inching up by 0.2% in February. Economists had expected producer prices to edge up by 0.1 percent. A 2.2% rise in food prices was largely cancelled out by a 2.1% fall in energy prices.
Comments from ECB Governing Council member Ewald Nowotny saw the EUR strengthen against the majors. Mr Nowotny said that the central bank's asset purchase program would exit this year enabling the ECB to gradually hike the deposit rate. Mr Nowotny went on to say that it was too early to tell when the rate hike would be implemented.
Oil prices continue to surge higher with Saudi Arabia rumoured to be targeting oil prices at $80 a barrel in an effort to boost the valuation of its oil giant Aramco ahead of its IPO.
With little in the way of economic data during our trading day, investors will look to tonightâ€™s US inflation report and tomorrow mornings FOMC meeting minutes for direction.
Global equity markets have started the week on the front foot - Dow +1.44%, S&P 500 +1.58%, FTSE +0.15%, DAX +0.17%, CAC +0.10%, Nikkei +0.51%, Shanghai +0.23%.
Gold prices have edged higher, up 0.3% trading at $1,336 an ounce. WTI Crude Oil prices have surged higher, up 2.3% trading at $63.53 a barrel.
The NZDUSD opens at 0.7308 (mid-rate) this morning.
The NZD is the strongest performing of the G10 currencies, pushing back above 73 US cents. The USD remains under pressure on the back of ongoing China US trade tensions and Fridayâ€™s disappointing non-farm-payroll result which has seen the Dollar Index (DXY) slip back below 90.
Overnight, Euro-zone investor confidence unexpectedly weakened with the Sentix index which had been expected to remain at 24.0 falling to 19.6 in April.
Germany's exports declined for the second consecutive month in February down 3.2% m/m following on from Januaryâ€™s 0.4% fall. The 3.2% fall was the largest since August 2015, and surprised economists who had forecast a 0.2% increase.
Yesterday afternoons Japanese economic data disappointed with both consumer confidence and current account data releases failing to meet expectations. Consumer confidence which had been expected to rise to 44.6 remained at 44.3, while Februaryâ€™s current account surplus fell 28.7% on year.
This morningâ€™s business confidence data release should prove to be the highlight of our trading day while overnight tonight investors will look to the US PPI data for direction.
Global equity markets have started the week on the front foot - Dow +1.44%, S&P 500 +1.58%, FTSE +0.15%, DAX +0.17%, CAC +0.10%, Nikkei +0.51%, Shanghai +0.23%.
Gold prices have edged higher, up 0.3% trading at $1,336 an ounce. WTI Crude Oil prices have surged higher, up 2.3% trading at $63.53 a barrel.
The NZDUSD opens at 0.7206 (mid-rate) this morning.
The Kiwi has fallen against the majors except the Japanese Yen which is up 0.2% overnight. The NZDUSD has traded a 102 point or 1.42% range in this shortened week, and will remain soft going into the long weekend as traders square their positions.
Oil prices pared some of their earlier losses after the U.S. Energy Information Administration said crude supplies rose by 1.6 million barrels for the week ended March 23. Analysts surveyed by S&P Global Platts had forecast a climb of 1 million barrels, while the American Petroleum Institute on Tuesday reported a jump of 5.3 million barrels, according to sources.
The U.S. economy grew in the fourth quarter at a faster pace than last estimated, helped by an upward revision to household spending on services and a smaller drag from inventories, according to Commerce Department data released overnight.Gross domestic product grew at a 2.9% annualized rate, (est. 2.7%) revised from 2.5%
U.S. Consumer spending, biggest part of the economy, grew 4% (est. 3.8%) revised from 3.8%.
The U.S. international trade deficit was $75.4 billion in February, up $0.1 billion from $75.3 billion in January. Exports of goods for February were $136.5 billion, $2.9 billion more than January exports.
U.S. Wholesale inventories for February, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $626.7 billion, up 1.1% from January 2018, and were up 5.7% from February 2017.
U.S. Retail inventories for February, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $628.1 billion, up 0.4% from January 2018
Global equity markets are higher mixed: Dow +0.34%, S&P 500 +0.15%, FTSE +0.64%, DAX -0.25%, CAC +0.29%, Nikkei -1.34%, Shanghai -1.40%.
Gold prices have plummeted 1.4% or $19 trading at $1,325 an ounce. WTI Crude Oil prices have also plummeted 1.4% over the past 24 hours, trading at $64.38 a barrel.
The NZDUSD opens at 0.7297 (mid-rate) this morning.
The NZD is trading higher against all its rivals with risk appetite returning after news broke that the US and China have engaged in talks for refining access of US goods to China.
US Treasury Secretary Steven Mnuchin during a Fox News interview, stated "We're having very productive conversationsâ€ with China, and that he is "cautiously hopeful" a trade agreement can be reached. US equities rallied strongly on the news with the Dow currently up 2.0%.
The EUR strengthened overnight after ECB Governing Council Member Jens Weidmann said the ECB should begin policy normalization without any delay, and hopes for a rate hike around mid-2019 are "not completely unrealistic,". Mr Weidmann who also heads the Bundesbank was speaking at a conference at the Austrian Central Bank.
This morning FOMC Member Loretta Mester is due to speak about the economic outlook and monetary policy at Princeton University while overnight tonight US consumer confidence index is expected to nudge up to 131.2 in March a slight increase from Februaryâ€™s 130.8 reading.
Global equity markets are mixed - Dow +1.84%, S&P 500 +1.50%, FTSE -0.48%, DAX -0.83%, CAC -0.57%, Nikkei +0.72%, Shanghai -0.60%.
Gold prices are up 0.6% trading at $1,354 an ounce. WTI Crude Oil prices are down 0.5% over the past 24 hours, trading at $65.36 a barrel.
The NZDUSD opens at 0.7232 (mid-rate) this morning.
Global equities were the big loser on Friday with major averages accelerating to the downside after President Trump confirmed tariffs on up to $60bn in annual Chinese imports. Trump went on to say that â€œChina must pay for decades of unfairly acquiring American intellectual property.â€
China in retaliation has said it will impose tariffs on up to $3 billion worth of U.S. goods sparking a major sell-off in equities with the Dow down 1.77% and the S&P 500 down 2.1% on the day, and down 5.7% and 6.5% respectively on the week.
With investors focusing on trade war concerns Fridayâ€™s US economic data releases had little effect on the dollar. For the record new home sales fell by 0.6% to an annual rate of 618k in February from an upwardly revised 622k in January. Economists had expected new home sales in February to increase to 623K from the previously reported 593k in January. US durable goods orders spiked by 3.1% in February reversing a 2.55 fall in January.
The week ahead will continue to be dominated by trade talks with the pick of the economic data releases being Thursday nightâ€™s final US Q4 GDP result which is expected to rise to 2.7% up from the previously reported 2.5%.
Global equity markets fell sharply on Friday, - Dow -1.77%, S&P 500 -2.09%, FTSE -0.44%, DAX -1.77%, CAC -1.39%, Nikkei -4.51%, Shanghai -3.39%.
Gold prices pushed higher on Friday as safe haven demand increased, closing out the week at $1,346 an ounce, WTI Crude Oil prices steadied on Friday, closing out the week at $65.71 a barrel.
The NZDUSD opens at 0.7208 (mid-rate) this morning.
As widely expected the Federal Reserve has raised rates for the first time in 2018 and signalled that at least two further hikes are coming before the end of the year.
New Federal Reserve Governor Jerome Powell announced that the central bank now sees the benchmark rate at 2.9% in 2019 and 3.4% in 2020 up from 2.7% and 3.1% respectively. The 10yr Bond yield has pushed up from 2.87% prior announcement to 2.92%.
â€œThe economic outlook has strengthened in recent months,â€ with officials also repeating previous language that they anticipate â€œfurther gradual adjustments in the stance of monetary policyâ€.
The vote to raise the federal funds rate target range to 1.5% to 1.75% was a unanimous 8-0. The quarterly forecasts showed that policymakers were divided over the outlook for the benchmark interest rate in 2018. Seven officials projected at least four quarter-point hikes would be appropriate this year, while eight expected three or fewer increases to be warranted.
Wage growth in the UK accelerated at the fastest pace in more than two years during the three months to January Average earnings excluding bonuses grew 2.6% year-on-year in the three months to January, which was the fastest pace since November 2016, when regular pay rose 2.7%.
he Reserve Bank today left the Official Cash Rate (OCR) unchanged at 1.75 percent.
Global equity markets are mixed - Dow +0.45%, S&P 500 +0.31%, FTSE -0.32%, DAX +0.01%, CAC -0.24%, Nikkei -0.47%, Shanghai -0.29%.
Gold prices are up 0.8% trading at $1,322 an ounce. WTI Crude Oil prices continue to spike, up 2.0% over the past 24 hours, trading at $64.72 a barrel
The NZDUSD opens at 0.7192 (mid-rate) this morning.
The NZD is the weakest performing G10 currency coming under pressure after the spread between the New Zealand and US 10-year government bond yields turned negative for the first time since records began back in the mid-1990s.
Earlier this morning the latest Global Dairy Trade (GDT) auction resulted in another fall in dairy prices with the index down 1.25 following on from the previous 0.6% fall a fortnight ago. Whole Milk Powder was the only product to increase edging up 0.1%, while skimmed milk prices suffered the largest fall down 8.6%. Volumes were also down with 18,365MTâ€™s selling at this morningâ€™s auction down from 19,292 MTâ€™s at the last event.
The USD has risen against all its rivals overnight as investors position their books ahead of tomorrow morningâ€™s FOMC meeting. The Fed is widely expected to hike its benchmark by 25 basis points to 1.75% from the current 1.50%. Direction is likely to be driven by the following press conference and any revision to the Fed's dot-plot forecasts which showed three rate hikes for 2018 at the December meeting.
Overnight the ZEW Indicator of Economic Sentiment for Germany plummeted sharply in March with the index falling to 5.1 down 12.7pts from 17.8 in February. The fall was a direct result of global trade concerns following Trumpâ€™s announcement of possible tariffs.
A slowdown in UK inflation in February with consumer prices rising by an annual rate of 2.7% (exp 2.8%) and down from 3.0% in January has had little effect on the British pound, which continues to benefit from yesterdayâ€™s Brexit transition agreement.
Global equity markets are broadly higher - Dow +0.40%, S&P 500 +0.10%, FTSE +0.26%, DAX +0.74%, CAC +0.57%, Nikkei -0.47%, Shanghai +0.35%.
Gold prices have edged down 0.5% trading at $1,311 an ounce. WTI Crude Oil prices have risen sharply, up 2.2% over the past 24 hours, trading at $63.47 a barrel.
The NZDUSD opens at 0.7241 (mid-rate) this morning.
The GBP has been the strongest performing currency over the past 24 hours, advancing against all its rivals following reports that the European Union and the UK have reached a post-Brexit transitional deal.
The deal will enable the UK to continue its European membership and retain the benefits of the single market and customs union until the end of 2020.
In order to reach this agreement the UK has had to accept defeat on a series of demands, including accepting a â€œback stopâ€ plan of keeping Northern Ireland under EU law to avoid a hard border with the Republic of Ireland.
A Reuters media report suggesting that ECB policy makers have moved their debate to the course of rate hike in 2019 and are of the view that QE program should end this year, has helped support a stronger EUR.
The Eurostat Euro-zone trade balance report showed the trade surplus declined to a three-month low in January with exports declining amid an increase in imports. The trade surplus for January fell to EUR 19.9B down from EUR 23.2B in December. Economists had expected the surplus to edged down to EUR 22.6B.
This morningâ€™s Westpac consumer sentiment data should have little effect on the currency, while overnight tonight the latest GDT auction is expected to show another small fall in dairy prices.
Global equity markets are mixed - Dow -0.42%, S&P 500 +0.01%, FTSE -0.13%, DAX +0.58%, CAC +0.04%, Nikkei +1.65%, Shanghai +0.59%.
Gold prices have edged down 0.5% trading at $1,320 an ounce. WTI Crude Oil prices have fallen sharply, down 1.4% over the past 24 hours, trading at $61.18 a barrel.
The NZDUSD opens at 0.7215 (mid-rate) this morning.
The NZD along with the AUD continues to underperform with ongoing concerns over US trade policy weighing on sentiment.
On Friday an unexpected downward revision to Euro-zone inflation will make it very difficult for the ECB to end its bond-buying program and raise its interest rate. The data release showed inflation for the month of February at 1.1% down from an earlier estimate of 1.2% and well below the ECBâ€™s goal of just under 2%.
US consumer sentiment and industrial production both printed ahead of expectations countering a very poor housing starts data release. The University of Michigan preliminary consumer sentiment report for March has the index at 102.0 up from Februaryâ€™s final reading of 99.7 and well ahead of the expected 99.3 reading. US industrial production for February surged 1.1% following a downwardly revised 0.3% fall in January. Economists had expected production to increase by 0.3%. Countering these better than expected data releases was an unexpected sharp pullback in new residential construction during February, with the Commerce Department report showing housing starts fell by 2.7% from Januaryâ€™s final reading.
The week ahead will be dominated by Thursdayâ€™s FOMC meeting with new Federal Reserve Chairman Jerome Powell widely expected to raise its benchmark interest rate. As of this morning the market is pricing in 95% of an expected 0.25% hike.
Global equity markets closed out the week mixed, - Dow +0.29%, S&P 500 +0.17%, FTSE +0.34%, DAX -0.07%, CAC +0.36%, Nikkei -0.58%, Shanghai -0.65%.
Gold prices edged lower on Friday, down 0.4% closing out the week at $1,313 an ounce, WTI Crude Oil prices pushed higher on Friday, up 1.9%, on the day to close out the week back above $62.00 a barrel.
The NZDUSD opens at 0.7274 (mid-rate) this morning.
The Kiwi fell after yesterday morningâ€™s NZ GDP printed at 0.6% which was lower than the 0.8% market consensus. The NZDUSD has traded an 84 point or 1.16% range this week but is down from Tuesdayâ€™s 0.7354 high.
The Swiss National Bank (SNB) is maintaining its expansionary monetary policy, with the aim of stabilising price developments and supporting economic activity.Interest on sight deposits at the SNB is to remain at â€“0.75%and the target range for the three-month Libor is unchanged at between â€“1.25% and â€“0.25%. Since the last monetary policy assessment in December, the Swiss franc has appreciated slightly overall on the back of the weaker US dollar.
Business activity grew robustly in New York State, according to firms responding to the March 2018 Empire State Manufacturing Survey. The headline general business conditions index climbed nine points to 22.5. The strongest readings were for the new orders index which rose to 16.8 and the shipments index which advanced to 27.0
Results from the March Philadelphia Fed Manufacturing Business Outlook Survey suggest continued growth for the regionâ€™s manufacturing sector. The surveyâ€™s index for general activity moderated from 25.8 in February to 22.3 this month.
The number of Americans filing for unemployment benefits fell last week, pointing to sustained labour strength even as economic growth appears to have slowed early in the first quarter. In the week ending March 10, the advance figure for seasonally adjusted U.S. Initial Claims was 226,000, a decrease of 4,000 from the previous week's revised level. The previous week's level was revised down by 1,000 from 231,000 to 230,000. The 4-week moving average was 221,500, a decrease of 750 from the previous week's revised average.
Global equity markets are higher except the S&P 500 and China: Dow 0.59%, S&P 500 -0.10%, FTSE +0.10%, DAX +0.88%, CAC +0.65%, Nikkei +0.12%, Shanghai -0.01%.
Gold prices are down 0.5% or $6 currently trading at $1,318 an ounce. WTI Crude Oil prices rallied another 0.7% currently trading at $61.27 a barrel.
The NZDUSD opens at 0.7341 (mid-rate) this morning.
The Kiwi is the best performer of the G10 currencies overnight, setting a 2 week high against the USD, and rallying strongly against the Canadian Dollar and the Japanese Yen
U.S. Consumer Prices continued to firm in February, indicating inflation is creeping up toward the Federal Reserve's target without the kind of breakout that would warrant a faster pace of interest-rate hikes. Both the main consumer price index and the core gauge, which excludes food and energy, rose 0.2 percent from January, matching the median estimates of economists.
The U.S. CPI was up 2.2% in the 12 months through February, compared with 2.1% in January, while the core index increased 1.8% from a year earlier for a third month. Thatâ€™s in line with policy makersâ€™ outlook for price gains steadily approaching their goal and officialsâ€™ projection for three quarter-point interest-rate hikes this year, including one anticipated at the Fedâ€™s meeting next week.
UKâ€™s annual budget release overnight showed the UK has lifted its 2018 economic growth forecast to 1.5%, and inflation falling to the Bank of England target with a year.
China is merging its banking and insurance regulators, giving new powers to policymaking bodies such as the central bank and creating new ministries in the biggest government shake-up in years. The revamp is a cornerstone of President Xi Jinpingâ€™s agenda to put the leadership of the ruling Communist Party squarely at the heart of policy with Xi himself at the core of the party. The economy and the party have become ever more intertwined since a party congress in October when Xi consolidated his grip on power, with party control deemed necessary to help push through reforms.
Bank of Canadaâ€™s Governorâ€™s Poloz stated overnight that recent data has been in line with the BOCâ€™s outlook but he doesnâ€™t know when interest rates may go up again. There has been an acceleration in wage growth consistent with the BOCâ€™s framework. The CAD weakened 0.75% against the USD and 1.5% versus the NZD.
US President Trump fired Rex Tillerson as Secretary of Stateand announced Mike Pompeo, Director of the CIA as his replacement. Gina Haspel will become the new Director of the CIA, the first woman to attain this position.
Global equity markets are lower except Japan: Dow -0.18%, S&P 500 -0.35%, FTSE -1.05%, DAX -1.59%, CAC -0.64%, Nikkei -+0.66%, Shanghai -0.49%.
Gold prices are up 0.5% or $7 currently trading at $1,327 an ounce. WTI Crude Oil prices fell 1.2% currently trading at $60.43 a barrel.
The NZDUSD opens at 0.7297 (mid-rate) this morning.
A lack of economic data to drive direction has seen currency markets trade within tight ranges over the past 24 hours. The NZDUSD is holding close to the middle of its two month 0.7200 - 0.7400 range.
Investors are likely to await tonightâ€™s US inflation data before adding to their positions. The monthly CPI data release is the last piece of the jigsaw and another strong number should all but insure the Federal Reserve hike rates next week. The market is currently pricing in 86% of the expected 0.25% hike.
The highlight for the NZD today will be RBNZ Governor Grant Spencer's speech titled "Getting the best out of macro-prudential policy" due for release at 12:45 this afternoon.
Global equity markets are mixed - Dow -0.42%, S&P 500 +0.01%, FTSE -0.13%, DAX +0.58%, CAC +0.04%, Nikkei +1.65%, Shanghai +0.59%.
Gold prices have edged down 0.5% trading at $1,320 an ounce.WTI Crude Oil prices have fallen sharply, down 1.4% over the past 24 hours, trading at $61.18 a barrel.
The NZDUSD opens at 0.7291 (mid-rate) this morning.
Stronger than expected job growth in the US failed to boost the USD with investors concerned over the slowdown in pace of wage growth. Fridayâ€™s labour department report showed non-farm payroll employment increased up by 313k jobs in February following on from an upwardly revised 239k jobs in January. Economists had expected employment to climb by 200k jobs, equalling the previously increase for January. Unfortunately for the USD the surge in jobs was countered by a pullback in the pace of wage growth which dipped to 2.6% in February from 2.8% in January. Unemployment also failed to meet expectations with the rate remaining at 4.1%, economists had expected the rate to edge down to 4%.
The EUR came under pressure late on Friday after the Destatis industrial production report showed Germanyâ€™s industrial production for January unexpectedly fell 0.1% m/m. the rate had been expected to increase by 0.7%.
As expected the Bank of Japan kept its monetary stimulus unchanged on Friday with board members once again voting to hold their target of raising the amount of outstanding JGB holdings at an annual pace of about JPY 80 trillion.
The key domestic driver for the NZD this week will be Thursdayâ€™sQ4 quarterly GDP report with the market currently expecting and increase of 0.8%.
Global equity markets closed for the week broadly higher, -Dow +1.77%, S&P 500 +1.73%, FTSE +0.30%, DAX -0.07%, CAC +0.39%, Nikkei +0.47%, Shanghai +0.57%.
Gold prices pushed higher on Friday, up 0.4% closing out the week at $1,326 an ounce, WTI Crude Oil prices pushed surged higher on Friday, up 2.6%, on the day to close out the week back above $62.00 a barrel.
The NZDUSD opens lower at 0.7255 this morning.
The EUR fell, and USD strengthened, after European Central Bank President Mario Draghi indicated that any monetary policy normalisation would be very gradual as regional inflation remained subdued, despite faster euro-zone growth. These factors weighed on the NZDUSD.
Draghi was critical of President Trumpâ€™s plans to impose tariffs on some imported goods. However, the White House announced late Wednesday that Canada, Mexico and possibly other countries may be granted exemptions.
Tariffs and any potential trade war/retaliation concerns willcontinue to be a market focus. Any noticable increase in impediments to free trade would be a negative for the NZD, due to its leverage to commodity prices and global growth.
The all-important US non-farm payroll employment figures, a key measure of the U.S. economy, will be released overnight. These numbers will be closely analysed for further clues on the pace of U.S. interest rate hikes.
There is no data on the domestic calendar today.
Global equity markets were higher on the day â€“ Dow -0.3%, S&P500 -0.1%, FTSE +0.6%, DAX +0.8%, CAC +1.3%, Nikkei +0.5%, Shanghai +0.5%.
Gold prices fell 0.4% to USD$1,321 an ounce. Oil prices (WTI) dropped -0.6% to USD$60.46 per barrel.
The NZDUSD opens at 0.7281 (mid-rate) this morning.
The Kiwi starts today lower against all its major trading partners except the CAD which is again testing significant resistance at 1.3000 versus the USD
The NZD drifted sideways during our trading day yesterday, but then rallied 70 points or almost 1% during the start of the US session. Major data releases overnight were the US Private Sector employment and US Trade Balance which were the catalysts for USD strength.
U.S. Private Sector Employment increased by 235,000 jobs from January to February according to the February ADP National Employment Report. The total again defied Wall Street expectations, as economists surveyed by Thomson Reuters were expecting payrolls to grow by 195,000. Growth actually decelerated slightly, as January posted an upwardly revised 244,000 from the initially reported 234,000.
The U.S. trade deficit increased to a more than nine-year high in January, with the shortfall with China widening sharply, suggesting that President Donald Trumpâ€™s â€œAmerica Firstâ€ trade policies are unlikely to have a material impact on the deficit. The Commerce Department reported the trade gap jumped 5.0% to $56.6 billion. That was the highest level since October 2008 and followed a slightly upwardly revised $53.9 billion shortfall in December. Economists polled by Reuters had forecast the trade gap widening to $55.1 billion in January from a previously reported $53.1 billion in the prior month.
Canada's merchandise trade deficit totalled $1.9 billion in January, narrowing from a $3.1 billion deficit in December. Following a record high in December, total imports were down 4.3% in January to $47.7 billion, with declines in all commodity sections. Industrial machinery, equipment and parts, consumer goods, as well as electronic and electrical equipment and parts were the main contributors to the decline in January
The Bank of Canada overnight maintained its target for the overnight rate at 1.25%. The Bank Rate is correspondingly 1.5% and the deposit rate is 1%. Global growth remains solid and broad-based. In the United States, new government spending and previously-announced tax cuts are anticipated to boost growth in 2018 and 2019.
Oil prices pared some of their losses overnight after the U.S. Energy Information Administration reported that domestic crude supplies rose by 2.4 million barrels for the week ended March 2. Analysts surveyed by S&P Global Platts had forecast a climb of 2.5 million barrels, while the American Petroleum Instituteon Tuesday reported a rise of 5.7 million barrels, according to sources. West Texas Intermediate (WTI) was down 2.7% from this time yesterday
Global equity markets are mixed: Dow -1.38%, S&P 500 -0.87%, FTSE +0.16%, DAX +1.09%, CAC +0.34%, Nikkei -0.77%, Shanghai -0.55%.
Gold prices are down 0.5% or $7 currently trading at $1,326 an ounce. WTI Crude Oil prices plummeted 2.7% currently trading at $60.85 a barrel.
The NZDUSD opens at 0.7224 (mid-rate) this morning.
The GBP has been the strongest performing of the G10 currencies after the HIS market PMI report showed the UK service sector activity expanded at the fastest pace in four months in February. Following January's 53.0 reading the index spiked to 54.5 in February, well ahead of the forecast 53.3 result.
The CAD continues to underperform with the US wanting to renegotiate a "new and fair NAFTA agreement" and Trump's overnight tweet that â€œCanada must treat our farmers much betterâ€ added further downward pressure on the CAD.
Yesterday's Italian election failed to produce an outright winner and resulted in another hung parliament. The Eurosceptic 5-Star Movement gained 31.8% of the vote emerging as the largest single party, while the anti-migrant and Eurosceptic League, formerly known as the Northern League also performed far better than expected.
This morning's US non-manufacturing index edged down to 59.5 in February from 59.9 in January, the dip was less than expected with economists forecasting the index to pull back to 59.0.
In the absence of any NZ economic data investors will look across the ditch to the Australian retail sales and monetary policy statement for NZDAUD direction.
Global equity markets are broadly higher - Dow +0.77%, S&P 500 +0.71%, FTSE +0.66%, DAX +1.49%, CAC +0.60%, Nikkei -0.66%, Shanghai +0.07%.
Gold prices have edged down 0.2% trading at $1,319 an ounce.WTI Crude Oil prices have surged higher, up 2.2% over the past 24 hours, trading at $62.42 a barrel.
The NZDUSD opens at 0.7242 (mid-rate) this morning.
Global equity markets along with the USD continued to struggle on Friday with investors concerned that Donald Trump's plans to impose new tariffs on steel and aluminium imports will lead to a global trade war.
The University of Michigan consumer sentiment index for February fell just short of its initial estimate of 99.9, recording a final reading of 99.7. The result showed sentiment in the US continues to improve with Februaryâ€™s reading up sharply from Januaryâ€™s 95.7 result.
As we await this morning's Italian election result the news that Germany's Social Democrats (SPD) have agreed to another coalition with Chancellor Angela Merkel's conservatives should support a stronger EUR. The Italian election result should be announced later this morning.
The week ahead will be dominated by central bank announcements with the RBA, ECB BOC and BOJ all due to release their latest monetary statements.
Global equity markets fell further on Friday, - Dow -0.29%, S&P 500 +0.50%, FTSE -1.47%, DAX -2.27%, CAC -2.39%, Nikkei -2.50%, Shanghai -0.59%.
Gold prices pushed higher on Friday, up 1.2% closing out the week at $1,322 an ounce, WTI Crude Oil prices edged higher on Friday, up 0.2%, on the day to $61.09 a barrel.
The NZDUSD opens at 0.7221 (mid-rate) this morning.
The NZD is the best performer of the G10 Currencies overnight, gaining 1% against our neighbour the AUD.
The Kiwi had a brief flutter under the 0.7200 support yesterday afternoon, reaching a low of 0.7186, and not quite the Feb 8 low of 0.7175. This formed an upside down â€œVâ€ in the hourly chart, with 0.7437 Feb 16 high as the top. The price action is still above the 200 day moving average which is also at 0.7175 forming a strong pivot point, and near term support as a double bottom.
The upturn in the UK manufacturing sector slowed further during February. At 55.2, the seasonally adjusted IHS Markit/CIPS Purchasing Managersâ€™ Index (PMI) fell to an eight-month low and lost further ground after hitting a 51-month high last November. Manufacturing production increased at the slowest pace for 11 months in February, with decelerations seen across the consumer, intermediate and investment goods sectors.
The number of Americans filing for unemployment benefits unexpectedly fell last week, hitting the lowest level in more than 48 years, pointing to a rapidly tightening labour market. Initial claims for state unemployment benefits dropped 10,000 to a seasonally adjusted 210,000 for the week ended Feb. 24, the lowest level since December 1969.
U.S. Economic activity in the manufacturing sector expanded in February, and the overall economy grew for the 106th consecutive month, say the nationâ€™s supply executives in the latest Manufacturing ISM Report On Business. The February PMI registered 60.8%, an increase of 1.7 percentage points from the January reading of 59.1%.
Fed Chairman Powell testified at the Semiannual Monetary Policy report before the Senate Banking Committee. While the hourly candle in the charts traded the biggest range in the past 24 hours at the time, the direction was unchanged as the Kiwi continued higher to 0.7253. Key takeaways were: "some continued strengthening on the labour market could take place without generating inflation", "fiscal policy will likely put upward pressure on inflation this year" "I expect to see more wage increases".
The catalyst of the Kiwi coming off its overnight highs was U.S. President Trump announcing he will place tariffs on steel and aluminium imports - a move that could trigger retaliation from trade partners who may target American products. The sign off will be next week. The USD strengthen 0.5% from there
Global equity markets are lower except China: Dow -1.32%, S&P 500 -0.97%, FTSE -0.78%, DAX -1.97%, CAC -1.09%, Nikkei -1.56%, Shanghai +0.44%.
Gold prices fell 0.9% or $12 currently trading at $1,306 an ounce.WTI Crude Oil prices plummeted 2.9% currently trading at $60.96 a barrel.
The NZDUSD opens at 0.7214 (mid-rate) this morning.
The NZD has lost ground against most of the major currencies. The NZD/USD looks to test support at 0.7200 however the Kiwi gained against the GBP on Brexit updates.
This morning the EU released their draft treaty, and to the disappointment of UK Prime Minister Theresa May the Europeans have announced that Northern Ireland could remain part of the customs union, which puts a spanner in the works for the UK PM, who has already made it clear that Brexit will not split up the UK. The GBP weakened against the other majors particularly the JPY.
U.S. economic growth slowed slightly more than initially thought in Q4 as the strongest pace of consumer spending in three years drew in imports and depleted inventories. U.S. Gross domestic product expanded at a 2.5% annual rate in the final three months of 2017, instead of the previously reported 2.6% pace, the Commerce Department said in its second GDP estimate.
The U.S. Chicago Business Barometer fell 3.8 points to 61.9 in February, down from 65.7 in January, to the lowest level since August 2017. Business activity continued to expand in February, although at a softer pace than in January.
After seeing a modest three-month rise in activity, U.S. Pending Home Sales cooled considerably in January to their lowest level in over three years, according to the National Association of Realtors. All major regions experienced monthly and annual declines in contract signings last month. The Pending Home Sales Index fell 4.7% to 104.6 in January from a downwardly revised 109.8 in December 2017.
Oil futures traded lower overnight after data showed industrial activity in some of the world's major crude-consuming nations has softened. Traders said oil prices declined on concerns of a slowdown in the global economy after three out of the world's top consumers of crude â€” China, India and Japan â€” reported a slowdown in monthly factory activity.
In February 2018, the Swiss KOF Economic Barometer rose by 0.4 points to a new reading of 108.0 well above its long term average.
Global equity markets are lower except the US: Dow -0.01%, S&P 500 -+0.22%, FTSE -0.69%, DAX -0.44%, CAC -0.44%, Nikkei +1.44%, Shanghai -0.99%.
Gold prices gained 0.2% currently trading at $1,318 an ounce.WTI Crude Oil prices are down 0.8% trading at $62.76 a barrel.
The NZDUSD opens at 0.7245 (mid-rate) this morning.
The NZD is the worst performer of the G10 currencies in the past 24 hours on a backdrop of broad USD strength after key data releases â€“ US Core Durable Goods, CB Consumer Confidence and Fed Chair Powellâ€™s Testimony.
The NZ Trade Balance was a $566m deficit which was wider than the $227m deficit in January 2017. The latest data is a big swing from December when the country recorded a trade surplus of $596m, the largest ever for a December month. Economists had been expecting exports and imports to cancel each other out in January for a net trade balance of zero.
Orders for business equipment at U.S. factories unexpectedly fell for a second month, a sign that demand is cooling from its hot pace in recent quarters. Excluding transportation-equipment demand, which is volatile, U.S. Durable Goods orders fell 0.3% in January (est. up 0.4%) after rising 0.7% in December.
The Conference Board U.S. Consumer Confidence Index increased in February, following a modest increase in January. The Index now stands at 130.8, up from 124.3 in January.
US Fed Chair Powell Testified to Congress in the semi-annual Monetary Policy Report. Powell downplayed concerns over recent market volatility, arguing Tuesday that the dramatic swings do not weigh heavily on his outlook for the economy and maintaining his expectation for further gradual increases in interest rates. In prepared congressional testimony, Powell emphasized that the job market remains robust, consumer spending is solid and wage growth is accelerating. He also highlighted gains in U.S. exports and stimulative fiscal policy as new "tailwinds" for the economy.
Global equity markets are lower except Japan: Dow -0.11%, S&P 500 -0.29%, FTSE -0.10%, DAX -0.29%, CAC -0.01%, Nikkei +1.07%, Shanghai -1.13%.
Gold prices fell 1.3% or $17 currently trading at $1,315 an ounce.WTI Crude Oil prices are down 1.2% trading at $63.28 a barrel.
The NZDUSD opens at 0.7305 (mid-rate) this morning.
The NZD is the best performer of the G10 currencies in the past 24 hours albeit with some modest gains. The NZDUSD has traded a 68 point or 0.93% range and opens above the 0.7300 support. The Kiwi today looks to start with a softer tone and to trend to the lower end of the channel range at 0.7250.
UK Card spending was 5.8% higher than in January 2017, although higher repayment levels meant that the pace of borrowing saw little change, growing at 4.8% annually.
UK Gross mortgage lending in January is estimated to have been Â£13.8bn, 7.7 % more than a year earlier and slightly above the monthly average of Â£21.4bn for 2017.
UK businesses' deposits grew by 7% in the past 12 months, while borrowing over the same period contracted slightly by 1.4 %. Within business sectors, manufacturers' borrowing expanded modestly, while construction and property-related sectors contracted.
ECB President Draghi spoke at a hearing of the Committee on Economic and Monetary Affairs of the European Parliament. He discussed the Euro Area inflation outlook and the main factors impacting the relationship between growth and inflation. The EUR fell initially but has since regained any lost ground to open just above the 1.2300 near term support.
U.S. sales of new homes unexpectedly fell in January to the lowest level since August as borrowing costs rose and winter weather depressed demand, according to government data released Monday. New Home Sales - Sales of new single-family houses in January 2018 were at a seasonally adjusted annual rate of 593,000, according to estimates released worse than the 655k expected.
Global equity markets are broadly higher: Dow +1.33%, S&P 500 +0.91%, FTSE +0.62%, DAX +0.35%, CAC +0.51%, Nikkei +1.19%, Shanghai +1.23%.
Gold prices are up 0.3% trading at $1,332 an ounce. WTI Crude Oil prices have continued higher up 0.5% trading at $64.04 a barrel.
The NZDUSD opens at 0.7342 (mid-rate) this morning.
The NZD is little changed against the majors after yesterday morning's FOMC meeting minutes, with the Japanese Yen the stand out performer in the last 24 hours.
Immediately after the release of the Fed Minutes the market took a full 10 minutes to digest the contents, before the USD weakened 50 points in 15 minutes, posting a 0.7386 high. Then in about-face the NZD/USD fell 1% or 72 points over the next hour where it remained stagnated for the rest of the day.
In the week ending February 17, the advance figure for seasonally adjusted initial claims was 222,000, a decrease of 7,000 from the previous week's revised level. The number of Americans filing for unemployment benefits unexpectedly fell to a near 45-year low last week, but claims for six states were estimated because of Monday's Presidents Day holiday. This data release was the catalyst for the NZD recovery to start today very similar to yesterdayâ€™s open.
Britain's economy grew at the weakest rate in 5 years, leaving the UK lagging further behind other major economies as it prepares to leave the EU. Q4 GDP estimate was 0.4% following an earlier estimate of 0.5% and missing economistsâ€™ forecasts that the rate would be unchanged.
European Central Bank policymakers meeting last month felt it was too early to change their communication stance to signal a normalisation of policy, even if confidence was growing that inflation would finally rise back to target, minutes showed. Discussion over tweaking the bankâ€™s stance could still start early this year but policymakers concluded the bank needed to avoid abrupt adjustments and to keep a close eye on the euro's firming, according to the minutes published overnight.
Oil futures erased a small decline to turn higher overnight after the Energy Information Administration said crude stocks fell by 1.6 million barrels. A survey of analysts by The Wall Street Journal had produced an average estimate for a 1.9 million barrel rise.
Global equity markets are broadly higher: Dow +0.87%, S&P 500 +0.45%, FTSE -0.40%, DAX -0.07%, CAC +0.13%, Nikkei -1.07%, Shanghai +2.17%.
Gold prices are up 0.3% trading at $1,330 an ounce. WTI Crude Oil prices have regained some of the losses earlier in the week now up 2.2% trading at $62.75 a barrel.
The NZDUSD opens at 0.7344 (mid-rate) this morning.
The NZD is little changed against the majority of its rivals ahead of this morningâ€™s FOMC meeting minutes.
The AUD is the worst performing of the G10 currencies, falling late yesterday afternoon following the release of their wage growth report. The headline number of a 0.6% increase was slightly ahead of the expected 0.5% rise, and equates to a 2.1% increase in wages in Q4, however private sector wage growth only increased by 1.9% compared to a 2.45 increase in the public sector and is struggling to keep pace with inflation.
As expected Euro-zone PMI data remains strong and although both the composite output index, and the purchasing managers' index fell just shy of their forecast readings they continue to expand at a solid pace.
The overnight US data sent mixed signals to investors with both manufacturing and services PMI data releases printing ahead of estimates while existing home sales in January surprised economists, falling 3.2% to an annual rate of 5.38m from a downwardly revised 5.56m in December. Economists had expected sales to increase to 5.61m from Decemberâ€™s previously reported 5.57m.
Global equity markets are broadly higher - Dow +0.38%, S&P 500 +0.58%, FTSE +0.48%, DAX -0.14%, CAC +0.23%, Nikkei +0.21%, Shanghai Closed.
Gold prices are down 0.5% trading at $1,326 an ounce. WTI Crude Oil prices have fallen further, currently down 1.3% trading at $61.37 a barrel.
The NZDUSD opens at 0.7348 (mid-rate) this morning.
For the first time in 2018 and breaking three consecutive rises in global dairy prices, this morningâ€™s GDT auction resulted in a marginal fall in the price index. Volumes also dipped with 20,256MT of products selling at this morningâ€™s auction down from 22,197MT at the previous event. Whole milk powder (WMP) prices edged up 0.3% to an average price of US$3,246/MT, however skimmed milk powder prices fell sharply, down 3% to an average price of US$1,832/MT.
Germany's economic confidence for February declined less-than-expected with the ZEW survey showing sentiment indicator fell from 20.4 in January to 17.8 in February. The result was better than expected with economists expecting the indicator to fall to 16.0. The indicator remains well below the long-term average of 23.7.
Overnight PMI data out of Europe and the US is expected is expected to remain solid and should have little effect on currencies ahead of tomorrow mornings FOMC meeting minutes data release.
Global equity markets are mixed - Dow -0.37%, S&P 500 +0.12%, FTSE -0.01%, DAX +0.83%, CAC +0.64%, Nikkei -1.01%, Shanghai Closed.
Gold prices are down 1.1% trading at $1,332 an ounce. WTI Crude Oil prices are inching lower, down 0.4% over the past 24 hours, trading at $62.16 a barrel.
The NZDUSD opens at 0.7371 (mid-rate) this morning.
A delayed reaction to the weekendâ€™s US economic data has boosted the USD overnight with the NZD unable to sustain its move back above 74 US cents.
Trading has been light with the US enjoying the long weekend and investors awaiting economic data for further direction.
This morning's PPI data is likely to have little effect on the local currency, with investors looking to tonightâ€™s GDT auction before adding to their positions.
Global Dairy Trade (GDT) auction prices have firmed since the start of the year and dairy futures are pointing to another slight rise in prices at this evening's event.
This afternoons RBA monetary policy meeting minutes should dictate direction for the NZDAUD cross rate, the data release is scheduled for 13:30.
Global equity markets are softer - Dow Closed, S&P 500 Closed, FTSE -0.64%, DAX -0.53%, CAC -0.48%, Nikkei +1.97, Shanghai Closed.
Gold prices are down 0.7% trading at $1,347 an ounce. WTI Crude Oil prices continue to rise, up 1.2% over the past 24 hours, trading at $62.41 a barrel.
The NZDUSD opens at 0.7385 (mid-rate) this morning.
US dollar weakness which saw the NZDUSD rate climb back above 0.7400 during our trading day on Friday, abated following better-than-expected US economic data.
The USD rallied against its rivals on Friday as housing data and consumer sentiment data releases printed ahead of expectations. The Commerce Department reported housing starts spiked by 9.7% in January, well ahead of the forecast 3.5% rise, while building permits for the same period surged to an annual rate of 1.4m (exp 1.3m).
The University of Michigan preliminary consumer sentiment reading for the month of February came in at 99.9 following Januaryâ€™s final reading of 95.7, economists had expected the index to inch down to 95.7.
Thursday morningâ€™s FOMC meeting minutes will be the main focus for investors during the week ahead, while key drivers for the NZD will be Wednesday morningâ€™s dairy trade auction and Fridayâ€™s Q4 retail sales data release.
US equity markets had a positive close on Friday, - Dow +0.08%, S&P 500 +0.04%, FTSE +0.83%, DAX +0.86%, CAC +1.13%, Nikkei +1.19%, Shanghai +0.45%.
Gold prices pushed higher on Friday, up 0.4% closing out the week back above $1350 an ounce at $1,356, WTI Crude Oilprices pushed higher on Friday, up 1.4%, on the day to $61.68 for a weekly gain of 4.2%.
The NZDUSD opens at 0.7384 (mid-rate) this morning.
The NZD traded at 0.7400 overnight and starts today reasonably flat against the other major currencies. The NZDUSD cross has traded a 181 point range or 2.5% this week, trending higher each day from last Fridayâ€™s 0.7175 low.
U.S. producer prices accelerated in January, boosted by strong gains in the cost of gasoline and healthcare, offering more evidence that inflation pressures were building up. The report came on the heels of data on Wednesday night showing a broad increase in consumer prices in January. US PPI rose 0.4% last month after being unchanged in December. In the 12 months through January, the PPI rose 2.7% after advancing 2.6% in December.
U.S Business activity continued to expand in New York State, according to firms responding to the February 2018 Empire State Manufacturing Survey. The headline general business conditions index (Philly Fed Survey) fell five points to 13.1, suggesting a somewhat slower pace of growth than in January.
Results from the Manufacturing Business Outlook Survey suggest that the regionâ€™s manufacturing sector continues to expand in February. The indexes for general activity, new orders, and employment were all positive this month and increased from their readings last month. Price increases for inputs were more widespread this month, according to the respondents. The index for current manufacturing activity increased 4 points in February to a reading of 25.8.
The number of Americans filing for unemployment benefits rebounded from a near 45-year low last week, but remained below a level that is associated with a tightening labour market. U.S. Initial Claims for state unemployment benefits increased 7,000 to a seasonally adjusted 230,000 for the week ended Feb. 10
U.S. factory output was flat in January, for the second straight month, raising questions about the manufacturing outlook as production dropped in the aerospace, plastics and food industries.
Global equity markets are broadly higher: Dow +0.57%, S&P 500 +0.71%, FTSE +0.29%, DAX +0.06%, CAC +1.11%, Nikkei +1.47, Shanghai +0.45%.
Gold prices are slightly higher up 0.3% trading at $1,351 an ounce. WTI Crude Oil prices are surged 2.8% higher trading at $60.83 a barrel
The NZDUSD opens at 0.7364 (mid-rate) this morning.
The NZD is the strongest performing of the G10 currencies after the RBNZ quarterly business confidence survey showed business managers forecast annual inflation to average 2.11% over the next two years, from 2.02% in Q4 survey. The 12 month inflation expectation inched down 0.1% to 1.86% from Q4â€™s 1.87% prediction.
The US inflation data printed ahead of expectations with the USD spiking higher on the announcement before gradually reversing the move over the next two hours.
The Labour Department report showed January CPI rose to 0.5% following an upwardly revised 0.2% result. Economists had forecast the index to rise by to 0.3% up from Decemberâ€™s previously reported 0.1% rise. Core consumer prices which exclude food and energy prices rose by 0.3% in January after inching up by 0.2% in December. Core prices had been expected to increase by 0.2%.
US retail sales for the month of January unexpectedly decreased, with the Commerce Department report showing sales fell by 0.3% following Decemberâ€™s 0.4% increase. Economists had expected Januaryâ€™s retail sales to increase by 0.2%.
Today the NZDAUD cross rate direction will be driven by this afternoonâ€™s Australian monthly employment report, while overnight tonight US PPI along with their manufacturing data will be closely monitored.
Global equity markets are broadly higher - Dow +0.21%, S&P 500 +0.62%, FTSE +0.64%, DAX +1.17%, CAC +1.10%, Nikkei -0.43, Shanghai +0.45%.
Gold prices have surged higher up 1.5% trading at $1,345 an ounce. WTI Crude Oil prices are edging higher, up 0.3% trading at $59.20 a barrel.
The NZDUSD opens at 0.7278 (mid-rate) this morning.
Ahead of tonightâ€™s eagerly awaited US inflation report direction for the NZD will be dictated by this afternoons RBNZ inflation expectations report.
The Yen is the best performing of the G10 currencies as equity markets turn negative and investors trim their USD long positions and flock to safe-havens.
Overnight UK inflation remained unchanged at 3% in January, the Office for National Statistics report showed core inflation which excludes energy, food, alcoholic beverages and tobacco, rose to 2.7% from 2.5% in December. Both results were ahead of expectations with economists forecasting inflation to edge down 0.1% to 2.9%, while core inflation had been forecast to rise to 2.6% up from 2.5% in December.
Following strong job and wage growth an increase in US core inflation of 0.2% or better is likely to see the Federal Reserve bring forward its plans for tightening and increase treasury yields, it was this possible outcome that led to last weeksâ€™ equity sell-off.
Global equity markets have turned negative - Dow -0.32%, S&P 500 -0.14%, FTSE -0.13%, DAX -0.70%, CAC -0.60%, Nikkei -0.65, Shanghai +0.98%.
Gold prices are up 0.8% trading at $1,325 an ounce. WTI Crude Oil prices have given back yesterdayâ€™s gains down 0.8% trading at $59.04 a barrel.
The NZDUSD opens at 0.7246 (mid-rate) this morning.
The AUD has been the strongest performer over the past 24hrs, with the NZD little changed against the other majors.
The NZDUSD traded to a session high of 0.7275 but has failed to hold this level and is back trading at yesterdayâ€™s open. The catalyst for the push higher was yesterdayâ€™s better than expected Electronic Card Retail Sales data for the month of January. The data showed credit card spending in New Zealand spiked a seasonally adjusted 0.6% in January following on from Decemberâ€™s 0.2% gain.
Global equity markets have rallied strongly overnight with investors picking up stocks at reduced levels following last weeksâ€™ sell-off. Rising commodity prices has also assisted the move with gold prices up circa 1% from the open.
There is very little in the way of local economic data during our trading session with investors likely to focus their attention on tonightâ€™s UK inflation data and tomorrowâ€™s RBNZ Inflation Expectations report for direction.
Global equity markets have started the week on the front foot - Dow +1.81%, S&P 500 +1.21%, FTSE +1.09%, DAX +1.45%, CAC +1.20%, Nikkei Closed, Shanghai +0.78%.
Gold prices are up 0.8% trading at $1,325 an ounce. WTI Crude Oil prices have edged higher, up 0.5% trading at $59.52 a barrel.
The NZDUSD opens at 0.7245 (mid-rate) this morning.
Currency markets traded tight ranges on Friday as volatile global equity markets continued to take centre stage.
US equity markets turned positive on the day as traders reacted to news that lawmakers have managed to end a short government shutdown with a bill raising spending caps and funding the government until March 23rd.
The NZD was the strongest performer of the G10 currencies with the British pound the weakest. The GBP fell after the Office for National Statistics reported an increase in the UKâ€™s trade deficit to GBP 13.57b in December from GBP 12.45b in November. Economists had expected a shortfall of GBP 11.55 b.
US wholesale inventories increased by more than expected in December with the Commerce Department report showing wholesale inventories rose by 0.4% in December after climbing by a revised 0.6% in November. Economists had expected inventories to inch up by 0.2%.
Domestically Wednesday's quarterly Inflation Expectations data release will be key to the NZDâ€™s performance while on Thursday morning the US CPI and retail sales data releases will be key drivers for both the USD and equity markets.
US equity markets had a positive close on Friday , - Dow +1.38%, S&P 500 +1.49%, FTSE -1.09%, DAX -1.25%, CAC -1.41%, Nikkei -2.32%, Shanghai -4.05%.
Gold prices inched lower on Friday, edging down 0.1% closing out the week at $1,315 an ounce, WTI Crude Oil prices fell sharply on Friday, down 3.1%, closing out the week $59.20 a barrel.
The NZDUSD opens lower at 0.7228 this morning.
The Kiwi was the worst performer of the G10 currencies overnight as global markets continued to fall.
The RBNZ left rates unchanged at 1.75% yesterday morning, with RBNZ Governor Spencer stating "we are not concerned about currency and are comfortable with where it is at."
The Bank of England Monetary Policy Committee voted unanimously to maintain their Official Bank Rate at 0.5%. The U.K. economy expanded by 0.5 percent in the fourth quarter of 2017, slightly above the Bank's forecast of 0.4 percent. Incoming data for the country's economy has been mixed since the MPC's last meeting in December 2017.
U.S. filings for unemployment benefits unexpectedly declined last week, hovering close to an almost 45-year low and signaling a tight job market, Labour Department figures showed Thursday. In the week ending February 3, the advance figure for seasonally adjusted initial claims was 221,000, a decrease of 9,000 from the previous week's unrevised level of 230,000. The 4-week moving average was 224,500.
Overnight data tonight includes Swiss Unemployment Rate, UK Manufacturing Production, UK Goods Trade Balance, UK Contruction Output m/m, UK Industrial Production m/m, US Wholesale Inventories, Canadian Employment Change and Unemployment Rate
Global equity markets are lower except the Japan: Dow -2.06%, S&P500 -1.66%, FTSE -1.49%, DAX -2.62%, CAC -1.98%, Nikkei +1.13%, Shanghai -1.43%.
Gold prices are up 0.1% to USD$1,316 an ounce. Oil prices (WTI) are down 0.5% at USD$61.08 per barrel.
The NZDUSD opens lower at 0.7251 this morning.
The NZ Employment data surprised the market yesterday morning pushing the NZDUSD 30-40 points higher initially but the Kiwi gave up the gains overnight and more, on broad US Dollar strength. NZ Employment change q/q was 0.5% ahead of the 0.4% expected and the Employment Rate fell to 4.5% from 4.6% and economists were expecting a rise to 4.7%.
The Reserve Bank today left the Official Cash Rate (OCR) unchanged at 1.75 percent. The RBNZ press conference is at 10am.
UK Annual House Prices rises have slowed from 2.7% in December to 2.2% in January - the lowest rate since July last year. Not only was there a monthly decline but the quarterly rate of growth has also flattening out. Although employment levels grew by 102,000 in the three months to November, household finances are still under pressure as consumer prices continue to grow faster than wages.
The European Commission said overnight that the Euro-area economy will expand faster than previously anticipated this year and next, though it offered little comfort to the regionâ€™s central bank, saying inflation is expected to remain subdued. It sees expansion of 2.3% in 2018, up from 2.1% predicted in November and close to the decade-high rate reached in 2017.
The 2019 forecast was upgraded to 2%, meaning the outlook is broadly in line with the most recent projections from the European Central Bank and International Monetary Fund. The EUR/USD is down 150 basis points or 1.15% in response.
Canadian municipalities issued $8.1 billion in building permits in December, up 4.8% following a 7.3% decline in November. The December increase stemmed from higher construction intentions in the residential sector.
Oil prices fell 3.9% overnight after the U.S. Energy Information Administration reported that domestic crude supplies rose 1.9 million barrels for the week ended Feb. 2 well worse that the forecast for a rise of 2.8 million barrels.
Global equity markets are higher except the China and the S&P500: Dow +0.39%, S&P500 -0.25%, FTSE +1.93%, DAX +1.60%, CAC +1.82%, Nikkei -+0.16%, Shanghai -1.82%.
Gold prices are down $12 or 0.9% to USD$1,315 an ounce. Oil prices (WTI) are sharply lower, down 3.9% at USD$61.41 per barrel.
The NZDUSD opens 1.0% lower at 0.7311 this morning since Mondayâ€™s open.
Turbulent global markets have spooked investors and the Kiwi is down over 1% against the USD and Yen, but up almost 1% against the GBP, AUD and CAD.
Monday night saw the Dow drop 4.22% which was the biggest one day fall in 6 years, and was down over 2% last night but it has since recovered to be just in positive territory.
Bitcoin after falling 10% Thursday, 10% Friday and 15% Monday to $5920 its lowest since mid-November, recovered to above $7250 up roughly 6% Tuesday.
The RBA left the cash rate unchanged at a record low of 1.5% yesterday afternoon as expected, marking 18 months without a change. There has not been an official cash rate increase since November 2010 and economists and experts widely predict rates to remain on hold throughout most of this year.
Retail Sales in the Eurozone increased for the tenth time in as many months during January, the longest period of growth in the series history. That said, the rate of growth slowed, reflecting softer increases in Germany and France, while a decline was evident in Italy. The headline IHS Markit Eurozone Retail PMI fell to 50.8 in January from 53.0 in December.
The US trade deficit swelled in December, and the $53.1 Billion shortfall was a slightly larger than expected. It was the largest deficit since October 2008. For 2017, the US recorded a trade deficit of goods and services of $566 Billion, the largest since 2008.
The U.S. IBD/TIPP Economic Optimism Index, a leading national poll on consumer confidence, increased in February to its highest level in more than 13 years. The overall Economic Optimism reading rose from 55.1 to 56.7, up 2.9%.
The Global Dairy Trade Price Index was up 5.9% compared with 4.9% last month.
Global equity markets are sharply lower except the US: Dow +0.07%, S&P500 -0.13%, FTSE -2.64%, DAX -2.32%, CAC -2.35%, Nikkei -4.73%, Shanghai -3.35%.
Gold prices are down $11 or 0.8% to USD$1,327 an ounce. Oil prices (WTI) are flat currently trading at USD$63.90 per barrel.
The NZDUSD opens sharply lower at 0.7295 this morning.
Is this the end of the golden summer for the NZDUSD and global equity markets?
Friday night's US non-farm payrolls employment figures exceeded expectations. Job growth picked up and wages increased at their fastest pace since 2009 â€“ the financial markets reacted violently with US bond yields surging higher (lower prices), equity markets plunged, the USD jumped higher, and the NZDUSD fell sharply.
The US employment data contributed to sentiment that US inflation is finally gathering momentum and higher interest rates are on the horizon. The markets have almost fully priced in 3 interest rate hikes in the US during 2018, with the first anticipated in late March. Higher interest rates are generallynegative for equity markets and positive for the USD (hence lower NZDUSD).
The RBNZ has a monetary policy (interest rate) meeting on Thursday. There is next to no chance of any interest rate increase any time soon, as inflation and inflation expectations remain lower than the RBNZ desires â€“ low wage growth is part of the problem.
Bitcoin and cryptocurrencies also plunged, this was more to do with regulatory concerns than US jobs numbers.
There is nothing scheduled on the NZ data calendar today,ahead of the Waitangi Day holiday Tuesday. Wednesday bringsquarterly employment numbers, followed by the RBNZ OCR (official cash rate) meeting and Monetary Policy StatementThursday.
Global equity markets nose-dived on the day â€“ Dow -2.5% (largest fall in 2-years), S&P500 -2.1%, FTSE -0.6%, DAX -1.5%, CAC -1.6%, Nikkei -0.9%, Shanghai +0.4%.
Gold prices fell 1.0% to USD$1,333 an ounce. Oil prices (WTI) dropped 1.1% to USD$65.06 per barrel.
The NZDUSD opens at 0.7385 this morning.
The Kiwi is stronger against the USD, JPY and AUD since yesterday morning's Fed "no Rate hike" and FOMC statement, but modestly weaker against the EUR and GBP.
Britain's manufacturers showed signs of a slowdown at the start of the year amid rising costs for raw materials, sending factory output to a seven-month low. The Markit/Cips UK manufacturing PMI index showed activity fell to 55.3 last month from 56.2 in December, missing forecasts of a further acceleration in growth. However, the PMI remained well above its long-run average of 51.7 and above the 50 mark which separates expansion from contraction.
U.S. Economic activity in the manufacturing sector expanded in January, and the overall economy grew for the 105th consecutive month, say the nation's supply executives in the latest Manufacturing ISM. The January PMI registered 59.1%, a decrease of 0.2% from the seasonally adjusted December reading of 59.3%. The New Orders Index registered 65.4%, a decrease of 2% from the seasonally adjusted December reading.
Operating conditions across the US manufacturing sector continued to improve in January, with the latest survey data indicating the strongest upturn since March 2015. Moreover, production levels and new orders grew at the quickest rates in twelve months. Rising global demand also drove a faster expansion in new export orders. Higher production requirements resulted in a sharp and accelerated increase in buying activity. At the same time, the rate of input cost inflation eased slightly but remained marked overall. Consequently, firms raised their selling prices at the second steepest pace since September 2014.
The number of Americans filing for unemployment benefits unexpectedly fell last week, pointing to a tightening labour market and strengthening economy at the start of the year. US Initial claims for state unemployment benefits slipped 1,000 to a seasonally adjusted 230,000 for the week ended Jan. 27. Data for the prior week was revised to show 2,000 fewer claims received than previously reported. Economists polled by Reuters had forecast claims rising to 238,000 in the latest week.
Overnight data tonight includes UK Construction PMI, US Average hourly earnings, US Non-Farm Employment Change, US Unemployment rate, US Uni. Of Mich. Consumer Sentiment revised and US Uni. Of Mich. Inflation expectations revised.
Global equity markets were mixed: Dow +0.48%, S&P500 +0.35%, FTSE -0.57%, DAX -1.41%, CAC -0.50%, Nikkei 1.68%, Shanghai -0.97%.
Gold prices are up 0.1% to USD$1,341 an ounce. Oil prices (WTI) surged 1.7% higher to USD$65.46 per barrel.
The NZDUSD opens at 0.7366 (Pre FOMC) this morning.
With the FOMC statement and federal funds rate decision out at 8:00 am NZT, you can expect the market to have moved from where we are currently sitting. Whilst no one is really expecting any actual hike till March, (75% chance of a hike then), it will be Yellenâ€™s last statement that the market will be watching closely for any clues that might change the future odds.
Yesterday we had Trumps first State of the Union address, which apart from the announcement of they had â€œended the war on beautiful, clean coalâ€, didnâ€™t really bring out any market moving headlines. He did reiterate how well the economy was doing though, which was back up by solid employment numbers, with 234k Non-Farm jobs added.
Out of Europe, CPI Flash estimates came bang on expectations
Apart from the big new at 08:00 this morning, there is not much data out, so expect the statement to drive momentum throughout the trading day as various financial centres come online.
Global equity markets were mixed, with the US halting their decline â€“ Dow 0.55%, S&P500 0.25%, FTSE -0.68%, DAX -0.06%, CAC 0.15%, Nikkei -0.83%, Shanghai -0.21%.
Gold prices rose 0.7% to USD$1,339 an ounce. Oil prices (WTI) were flat at USD$64.36 per barrel.
The NZDUSD opens higher at 0.7329 this morning.
The USD reversed gains from the prior day, as the markets await Thursdayâ€™s US Fed monetary policy announcement and Fridayâ€™s US non-farm payroll employment data. This pushed the NZDUSD back above 0.7300.
NZ's December Trade Balance exceed expectations yesterday. Total exports of $5.6 bio set a December record,and were $1.1bio higher than in December 2016. Record export value of dairy products was a primary driver.
The GBP slipped to a 1-week low against the USD on renewed concerns about the impact of Brexit on the UK economy and on the slow progress of the exit talks with the EU.
US bond yields continued to move higher, with the 10-year bond yield (interest rates) hitting 2.73% - close to a 4-year high. Higher yields have generally been USD supportive, but this has not been the case over the last 2 months.
There is nothing scheduled on the NZ data calendar today.Main highlights will be Australian Q4 inflation figures at 1.30pm, followed by President Trump's "State of the Union Address" at 3pm.
Global equity markets fell sharply on the day â€“ Dow -1.5%, S&P500 -1.1%, FTSE -1.1%, DAX -1.0%, CAC -0.9%, Nikkei -1.4%, Shanghai -1.0%.
Gold prices fell 0.7% to USD$1,336 an ounce. Oil prices (WTI) plunged 1.8% to USD$64.35 per barrel.
The NZDUSD opens lower, compared with Friday, at 0.7316this morning.
The USD gained across the board as US bond yields pushed higher ahead of Thursdayâ€™s US Fed interest rate meeting andFridayâ€™s US non-farm payrolls employment figures. The NZDUSD consequently fell from recent highs.
The Fed meeting will be Jerome Powellâ€™s first as Chair, having taken the mantle from Janet Yellen. The market is focused on whether we will see a continuation of Yellenâ€™s slow and steady rate hikes â€“ interest rate are anticipated to be increased 3 times during 2018, beginning in March, although some analysts are picking the Fed to raise 4 times.
The GBP weakened on fresh worries over whether Prime Minister Theresa May will be able to execute her Brexit plans.
NZ trade balance will be released at 10:45am
Global equity markets were mixed on the day â€“ Dow -0.3%, S&P500 -0.3%, FTSE +0.1%, DAX -0.5%, CAC -0.1%, Nikkei -0.0%, Shanghai -1.0%.
Gold prices fell 0.9% to USD$1,345 an ounce. Oil prices (WTI) dropped 0.9% to USD$65.53 per barrel.
The NZDUSD opens at 0.7343 (mid-rate) this morning.
The NZD has continued to push higher overnight posting a new post-election high against the USD and trading back above 0.9200 against the AUD, with a sharp fall in iron ore prices weighing on our cross Tasman rival.
Germany's economic confidence is sitting at an eight month high with the ZEW Indicator of Economic Sentiment increasing to 20.4 in January well ahead of the 17.7 forecast result. The increase represents a 3 point gain from Decemberâ€™s 17.4 reading but is still short of the long-term average of 23.7.
The UK's December public sector net borrowing which excludes banks, decreased by GBP 2.5B from the previous year to GBP 2.6B and represents the lowest December net in 17 years. A GBP 1.2B credit from the European Union and higher value-added tax were the main reasons for the result.
Overnight tonight, manufacturing and services data releases out of Europe and the US will dictate direction with tomorrow morningâ€™s quarterly inflation data the key driver for the NZD.
Global equity markets are mixed - Dow -0.11%, S&P 500 +0.12%, FTSE +0.21%, DAX +0.71%, CAC -0.12%, Nikkei +1.29%, Shanghai +1.29%.
Gold prices are up 0.5% trading at $1,337 an ounce. WTI Crude Oil prices continue to climb, up a further 1.0% overnight trading at $64.21 a barrel.
The NZDUSD opens at 0.7285 (mid-rate) this morning.
The USD is likely to continue to struggle this week after funding for US federal agencies ran out on Saturday midnight, forcing a partial US government shutdown. The shutdown has moved into its second day with the Democratic and Republican parties failing to reach a consensus on immigration.
US consumer sentiment unexpectedly deteriorated in the month of January, with the University of Michigan preliminary report showing the consumer sentiment index slipped to 94.4 in January from the final December reading of 95.9. The index had been forecast to rise to 97.0.
The Euro-zone current account surplus for the month of November increased to EUR 32.5B up from EUR 30.3B in October, The increase follows consecutive falls in September and October.
December retail sales in the UK declined more-than-expected with the Office for National Statistics reporting sales were down 1.5% following on from Novemberâ€™s 1% rise. This is the largest fall in retail sales since June 2016.
The key driver for the NZD during the week ahead will be Thursdayâ€™s Q4 inflation report.
Global equity markets rallied on Friday, - Dow +0.21%, S&P 500 +0.44%, FTSE +0.39%, DAX +1.15%, CAC +0.58%, Nikkei +0.19%, Shanghai +0.38%.
Gold prices trimmed their weekly losses on Friday, edging up 0.3% closing out the week at $1,331 an ounce, WTI Crude Oilprices fell on Friday, down 1.1%closing out the week $63.31.
The NZD opens at 0.7302 (Mid-rate) this morning.
The lack of outright movement since yesterday belies the fact that it was actually a relatively volatile day. The Kiwi broke through 0.7300, trading to a high of 0.7331 before getting knocked back to 0.7244.
Data out of the US came in fairly mixed, but fears of the US Government shutdown, although unlikely, have kept the USDâ€™s recent run of weakness going.
It is a pretty quiet weekend from a data perspective, with the volatile UK Retail Sales being the only major data of note to come out. You can expect it to miss expectations.
Wellington celebrates its Anniversary day on Monday, so although we cannot settle anything NZD related on Monday the 22nd, there will be no interruption to any other currencies or dealing.
Global equity markets are mixed - Dow -0.39%, S&P 500 -0.15%, FTSE -0.32%, DAX +0.74%, CAC +.02%, Nikkei -0.44%, Shanghai +0.87%.
Gold prices are down half a percent to $1,327 an ounce. WTI Crude Oil prices are virtually flat, trading at $64.00 a barrel.
The NZDUSD opens at 0.7314 (mid-rate) this morning.
The NZD came under pressure yesterday afternoon following the release of the ANZ commodity price index result for December. The index fell for the third month in succession, down 2.2% from November, with a 5.6% fall in dairy prices leading the way. The mover lower proved to be short-lived, with the NZD rebounding strongly against the USD as London and Europe entered the market.
US industrial production increased more than expected in December, with the Federal Reserve reporting industrial production surged 0.9% after edging down by 0.1% in November. Economists had forecast a 0.4% increase.
As mentioned in yesterday morningâ€™s report the bank of Canada hiked its cash rate by 0.25% to a rate of 1.25%, the hike was all but priced in with the CAD showing little reaction to the announcement. The increase in the cash rate was the third since July 2017.
Crypto currencies have extended their sharp fall overnight, the news that South Korea and China are planning a crackdown on the digital currency market has seen the bitcoin price plummet below USD10k from its USD20k peak in December.
During our trading day Australiaâ€™s monthly employment report will dictate direction for the NZDAUD cross rate, while overnight tonight Chinaâ€™s quarterly GDP data release should prove to be the highlight.
Global equity markets are mixed - Dow +0.73%, S&P 500 +0.53, FTSE -0.39%, DAX -0.47%, CAC -0.36%, Nikkei -0.35%, Shanghai +0.24%.
Gold prices are little changed $1,335 an ounce. WTI Crude Oilprices are up 0.6% trading at $63.93 a barrel.
The NZDUSD opens at 0.7273 (mid-rate) this morning.
The NZD has edged lower overnight failing to capitalise on this morningâ€™s Global Dairy Trade (GDT) auction result.
The second GDT auction of the New Year has seen the index increase by 4.9% following on from the 2.2% rise at the Jan 2ndevent. There were substantial increases in the Butter, Skim milk powder (SMP) and Whole milk powder (WMP) indexâ€™s which were all up more by than 5%. New Zealand dairy farmers will be pleased to see whole milk powder prices back above USD 3,000 a tonne with this morningâ€™s average selling price hitting USD 3,010 a tonne.
UK inflation eased for the first time in 6 months during December, with last nightâ€™s Office for National Statistics report showing inflation edged down to 3% from Novemberâ€™s 3.1% reading. Consumer prices increased by 0.4%, as expected for the month, while core inflation which excludes energy, food, alcoholic beverages and tobacco, dipped further than forecast, slowing to 2.5% in December down from 2.7% in November and just shy of the forecast 2.6% result.
Overnight, tonight and on the back of unexpectedly strong employment data and rising inflation the Bank of Canada are widely tipped to raise rates by a quarter-point, from 1.0% â€“ 1.25%. The last time the benchmark rate was above 1.0% was back in December 2008.
Global equity markets with the exception of the FTSE are trading higher - Dow +0.64%, S&P 500 +0.25, FTSE -0.17%, DAX +0.35%, CAC +0.07%, Nikkei +1.00%, Shanghai +0.77%.
Gold prices are down 0.4% to $1,334 an ounce. WTI Crude Oilprices have pulled back overnight, down 1.6% trading at $63.53 a barrel.
The NZDUSD opens at 0.7305 (mid-rate) this morning.
The US dollar index slumped to a 3-year low overnight helping the NZD break up through 73 US cents for the first time since our election stalemate.
Both the NZD and AUD are benefiting from a strengthening CNY with the USDCNY cross rate setting a new 20-month low of 6.4189 following last weekâ€™s better than expected Chinese trade and inflation data.
The EUR has climbed to its highest level against the USD since December 2014, with investors hoping that a coalition between Angela Merkelâ€™s conservative bloc and the Social Democrats will be finalised this week.
The key drivers for the NZD over the next 24 hours are this morningâ€™s business confidence report and tonightâ€™s GDT auction.
Global equity markets have edged lower - Dow Closed%, S&P 500 Closed, FTSE -0.12%, DAX -0.34%, CAC -0.13%, Nikkei +0.26%, Shanghai -0.54%.
Gold prices are little changed up 0.1% to $1,340 an ounce. WTI Crude Oil prices continue to push higher, up 0.6% trading at $64.59 a barrel.
The NZDUSD opens at 0.7251 (mid-rate) this morning.
The EUR and GBP were the big movers on Friday, with both currencies surging higher as the USD continued to struggle.
Friday's US inflation data fell short of economistsâ€™ estimates with the Labor Department report showing the consumer price index nudged up by 0.1% in December following on from a 0.4% increase in November. Economists had expected prices to rise by 0.2%. US retail sales for the same period increased in line with expectations rising by 0.4% following an upwardly revised 0.9% increase in November.
The EUR received a further boost on Friday evening after it was reported that German politicians had reached a breakthrough in talks and were close to forming a new c oalition government.
The only domestic economic data of note during the week ahead is Wednesday morningâ€™s global dairy trade auction, with farmers hoping for a further increase in prices following the slight rise recorded at the previous event.
Global equity markets with the exception of the Nikkei rallied on Friday, - Dow +0.89%, S&P 500 +0.67%, FTSE +0.20%, DAX +0.32%, CAC +0.52%, Nikkei -0.24%, Shanghai +0.10%.
Gold prices extended their weekly gains on Friday, up 1.2% closing out the week at $1,338 an ounce, WTI Crude Oil prices held steady on Friday, closing out the week $64.23 a barrel for a weekly gain of 5.7%.
The NZDUSD opens higher at 0.7248 this morning.
The NZDUSD rose to 3 1/2 month highs as the USD weakened overnight after data showed US producer prices fell for the first time in 18 months, causing concern inflation, and hence interest rate hikes, may be constrained.
The USD also suffered as the EUR jumped higher on expectations the European Central Bank policy makers are preparing to scale back their massive monetary stimulus programme as the euro-zone economy strengthens.
Oil prices continued to make gains as production cuts and increasing demand has gradually reduced the global surplus.
Australiaâ€™s November retail sales numbers were surprisingly strong. The figures received a boost from sales of the new iPhone X and Black Friday sales.
NZ building consents will be released at 10:45am
Global equity markets were mixed on the day â€“ Dow +0.6%, S&P500 -0.1%, FTSE +0.2%, DAX -1.0%, CAC -0.3%, Nikkei -0.3%, Shanghai +0.1%.
Gold prices rose 0.2% to USD$1,322 an ounce, a 4-month high. Oil prices (WTI) jumped 1.1% to USD$64.25 per barrel.
The NZDUSD opens at 0.7165 (mid-rate) this morning. The AUDUSD opens at 0.7868 (mid-rate) this morning.
Economic data releases over the next 24 hours.
AUD - 11:30 - AIG Construction Index
USD - 06:40 - FOMC Member Bostic Speaks-07:35 - FOMC Member Williams Speaks
EUR - 21:00 - Retail Sales m/m
Global equity markets continued to push higher on Friday, - Dow +0.88%, S&P 500 +0.70%, FTSE +0.37%, DAX +1.16%, CAC +1.05%, Nikkei +0.89%, Shanghai +0.18%
Gold prices were unchanged on Friday closing out the week at $1,319 an ounce. WTI Crude Oil prices fell 0.7% on Friday closing out the week at $61.41 a barrel.