The NZD opens down at 0.6832.
The AUD was actually the big mover yesterday, with the NZD being dragged down in sympathy. The RBA Governor Lowe came out with a speech, the highlight being a shift in guidance. Previously the RBA had been on hold, with the next expected movement likely to be a hike. Yesterday this guidance was tweaked, and risks are now “more balanced”, with the next move either being a hike or a cut. This took the market somewhat by surprise after the “Not Dovish” rate statement on Tuesday.
Solid numbers out of the Global Dairy Trade auction in New Zealand, with prices up 6.7%. This was on the top of good volume of supply. However, these days it is barely worth a mention as the GDT has completely fallen off the markets radar, and there is little follow through to the Kiwi.
The Brexit ping pong continues, with May advocating for a time limit on the Irish Backstop. The EU comes back that that is not negotiable. May then promises Parliament that she will get concessions out of the EU. The EU says the withdrawal agreement cannot now be renegotiated. May then says they need to discuss the backstop… Add on to all this that apparently May does not want a time extension, Parliament does not want to accept the current deal, and no one wants a no deal. Something has to give, but if an extension only gives us a few more months of the above, the EU could be forgiven for turning it down and forcing an outcome.
Employment data out of NZ today at 10:45, with the market picking a 4.1% Unemployment rate. Although last quarter come in very low at 3.9%, there is the perception that that was a little too good to be true, and Unemployment could push higher The Fed’s Powell also speaks at 1:00pm today. UK Official Bank rate decision overnight, which is widely expected to stay on hold.
Global equity markets have had a quiet day yesterday, Dow +0.04%, S&P 500 -0.16%, FTSE -0.06%, DAX -0.38%, CAC -0.08%, Nikkei +0.14%, Shanghai 1.3%.
Gold prices are slightly off, down 0.4% trading at 1,313 an ounce. WTI Crude Oil prices have risen up 0.6% trading at $54.08 a barrel
Current indicative rates:
Upcoming Data releases (NZST):
- 10:45 - NZ Unemployment rate, Employment change q/q
- 13:00- US Fed Chair Powell Speaks
- 01:00 - BOE Inflation report, Official Bank Rate
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