Currency movements have been modest with all the majors +/- 0.3% from the previous NY close versus the USD, which itself is fairly flat for the day on various weighted indices.
Oil prices are back below the $50 mark on both the Brent and WTI measures. There was a temporary lift this morning after better than expected inventory data were released, but the recovery proved short-lived. After the strong run in prices, induced by talk of production cuts, traders are nervous ahead of any formal agreement, as various players seek special exemptions from cuts.
The USD appeared to be on a downward path after the NZ close yesterday, but it has been revived overnight by some stronger than expected data, namely the Markit services PMI and the trade balance. The latter has seen some analysts revise up their Q3 GDP estimates, due for release on Friday, by 0.5% to now an annualised 3+%.
The AUD jumped higher after Q3 CPI inflation data were released yesterday afternoon. Market attention was focused on the higher than expected headline increase than the slighter softer average core measure. The probability for a near-term policy easing was seen to be lower, resulting in a stronger AUD, lifting it by over half a cent to blast through the 0.77 mark. However, that gain hasn’t been sustained overnight and this morning it trades back down to 0.7640.
The stronger Australian CPI and AUD seemed to see traders shift out of NZD positions, as the NZD fell to below 0.7150 after the result, and NZD/AUD plunged 70pips to just under the 0.93 mark. However, that proved to be short-lived and NZD/AUD embarked on a steady recovery thereafter and is back up to 0.9360, only 10pips lower compared to the pre-CPI level. NZD/USD sits at 0.7155, a touch lower compared to 24 hours ago.
Elsewhere, there’s not much else to report, with GBP and EUR up slightly against the USD to 1.2230 and 1.0905 respectively, while the Yen is slightly weaker, with USD/JPY back up to 104.45, after earlier approaching 104.00.
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