Ahead of tonight’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 weeks’ 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 yesterday’s gains down 0.8% trading at $59.04 a barrel.
Current indicative rates:
Upcoming Data releases (NZST):
- 10:45 - FPI m/m
- 15:00 - Inflation Expectations q/q
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