Finally some relief for the Kiwi overnight. The USD initially sold off on poor monthly PPI data, coming in at -0.1% relative to the 0.2% expected. While this lead to some of the weakness, it was the news that the $200B of new tariffs may not go ahead (at least for now) that added to the momentum. With the November mid-term elections coming up quickly, Trump may not want to be seen as being too reckless. Short term though, any willingness to get back to trade talks between the US and China is risk positive, and especially helps currencies like the NZD.
At 1:30 PM NZT we have the Australian Employment Change and Unemployment Rate data coming out. Generally the Unemployment Rate has been coming in lower than expectations, so I wouldn’t be surprised to see that trend continue, with the number coming in lower than what economists predict at 5.3%.
Pretty heavy data coming out overnight, both the Bank of England and ECB have interest rate decisions, though both are widely expected to remain on hold. With the recent USD weakness we have seen, monthly US CPI data becomes pretty interesting. I would expect a big miss to have a bit more follow through than normal.
Global equity markets were generally up - Dow +0.19%, S&P 500 +0.13%, FTSE +0.55%, DAX +0.52%, CAC +0.91%, Nikkei -0.27%, Shanghai -0.33%.
Gold prices rose almost 1% to USD$1,207 an ounce, while WTI Crude Oil prices continued to climb, up 1.1% to US $70.28 per barrel.
Current indicative rates:
Upcoming Data releases (NZST):
1:30 - AU Employment change, Unemployment rate
23:00 - UK Official bank rate
23:45 - ECB Main refinancing rate
12:30 - US CPI m/m, Core CPI m/m
- ECB Press Conference
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