With the US Martin Luther King holiday and no notable data releases very little happened overnight, with all the action being in the NZ time zone. A slight risk-off tone developed as GBP came under significant downward pressure at the NZ open.
This followed the weekend report in the Times (mentioned in our daily report yesterday) that PM May’s Tuesday speech would argue a hard Brexit line – recognising that the UK would lose its free trade access to the EU to secure free trade deals elsewhere and regain control of immigration. GBP dived to its lowest level since October's flash crash, reaching 1.1986 and taking NZD/GBP up to 0.5939.
Some recovery ensued after there were reports that the UK government was drawing up plans to reassure investors to counter any possible negative post-speech market reaction and a couple of Trump interviews were published in the Times and Bild. The tone of the interviews was anti-Germany and anti-EU, with Trump saying he’d offer Britain a quick and fair trade deal with America within weeks of taking office to help make Brexit a “great thing”. Trading overnight in GBP has been whippy and it sits around 1.2060, with NZD/GBP just below the 0.59 mark.
Amidst the risk-off tone, NZD has had a softer bias although it has traded in a very tight range since the local close, hovering close to the 0.71 mark and leaving it somewhat “cheap” on our short-term fair value model. The same applies to AUD, which trades around 0.7475, leaving NZD/AUD hovering around 0.95.
The yen has been the strongest of the majors, with USD/JPY down to 113.63 at its low but since recovering to just over the 114 mark. EUR sits at 1.06.
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9 Comments
The UK & May will do fine economically with Trump, even though they are both not following the 'script'.
Merkel is now admitting that she made a big mistake with her open door immigration & refugee policy & the economic disruption effect it has had.
https://www.ft.com/content/11150514-7e78-11e6-8e50-8ec15fb462f4
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With reference to the MLK holiday in the USA - a quote from Martin Luther King himself: “the whole world must see that Israel must exist and has the right to exist, and is one of the great outposts of democracy in the world"
Yes, I agree, Jordan, Egypt and Lebanon have suppressed the so called Palestinians in refusing them citizenship and equal rights, Jordan should be accommodating them in their homeland. So if they want an economic income etc they have to turn to Israel for jobs and experience life in a democracy.
True , Lebanon and Jordan has treated Palestinians terribly. They are effectively homeless and stateless cannot get an ID document or own property or vote in both Jordan and Lebanon , where they have lived for centuries
At least the Arabs living within Israel's border have the vote and their people are represented in the Israeli Parliament (Knesset) and are entitled to Israeli citizenship .
Even Arab women have the vote in Israel , and they dont have the vote in most Arabic countries .
True , Lebanon and Jordan has treated Palestinians terribly. They are effectively homeless and stateless cannot get an ID document or own property or vote in both Jordan and Lebanon , where they have lived for centuries
At least the Arabs living within Israel's border have the vote and their people are represented in the Israeli Parliament (Knesset) and are entitled to Israeli citizenship .
Even Arab women have the vote in Israel , and they dont have the vote in most Arabic countries .
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