Trump Escalates Trade Tension by Imposing Steel Tariffs on Allies EU, Canada and Mexico
Euro has been strong most of the day as Italian political risk temporarily receded. Stronger than expected Eurozone CPI reading also provided some support to the common currency. But it's Yen that's taking the spotlight again in early US session on risk aversion. DOW opened losing triple digits and...
Dollar Pressured as Focus Turns from Italy to US Steel Tariffs and Trade War
The forex markets are mixed today so far. Easing concerns over Italy political turmoil calmed markets temporarily. But the situation is not solve yet. Meanwhile, the upcoming decision on US steel tariff temporary exemption could turn sentiments around again. For now, Commodity currencies are generally higher with the help...
ANZ business confidence: Fairly uninspiring reading
New Zealand ANZ business confidence dropped to -27.2 in May, down from -23.4. That is, a net 27% of businesses are pessimistic about the year ahead. Views on their "own activity" also dipped from 18 to 14.
ANZ noted in the release that "the survey made for fairly uninspiring reading...
Re-emergence of Monetary Policy Divergence II – High – Yield Currencies
In our report last week, we pointed out that monetary policy divergence between the Fed and other major central banks has re-emerged since April. While economic developments in the first several months of the year have reinforced FOMC’s commitment to continue gradual rate hike as planned, other major centrals...
Australia & New Zealand Weekly: Prospects for the Australian Economy; Markets; and Global Risks
Week beginning 28 May 2018
Prospects for the Australian economy; markets; and global risks.
Australia: business capex, CoreLogic home prices, dwelling approvals, private credit.
NZ: RBNZ Financial Stability report, terms of trade, residential building consents, business confidence.
Euro Area: CPI, unemployment, Bank of Italy Governor speaks.
US: nonfarm payrolls,...
Yen Crosses Dive with Treasury Yields on Risk Aversion, UK and Eurozone Data Misses
Yen surges broadly today as driving by steep decline in major European and US treasury yields. German 10 year bund yield dropped to as low as 0.497, comparing to prior day's close at 0.559, and it's now at 0.500. UK 10 year gilt yield reached as low as 1.446,...
Yen Surges Broadly Risk Appetite Fades, GBPJPY on Shaky Ground ahead of UK CPI
Yen surges broadly today and is trading as the strongest one, followed by Swiss Franc. On the other hand, Canadian, Australian and New Zealand Dollar are under heavy selling pressure. The boost from optimism in China-US trade talk faded quickly and the markets are back in risk-off mode. DOW...
Sterling Lower ahead of Important Week Brexit Talks, CPI and GDP Revision
The development in the forex markets are pretty much unchanged. Australian, Canadian and US Dollar remain the strongest ones for the day. On the other hand, Japanese Yen and British Pound have been taking turns to be the weakest. Receding risks of US-China trade war is a key focus...
New Zealand Retail Sales Rises 0.1%
The U.S. dollar continued to maintain gains on the day on Friday and marks a strong close to the week. The gains come amid higher bond yields and mounting expectations of a rate hike from the Fed in the coming months.
On the economic front, data on Friday saw the...
Yen Lower as Receding Trade War Fears Lifts Risk Appetite, Dollar Extending Rally
Yen suffers broad based selling in today as lifted by return of risk appetite. Asian equities trade generally higher on receding fear of US-China trade war. The joint statement released on Saturday is seen as a "vow" to avoid trade war. It's affirmed by comments from US Treasury Secretary...
New Zealad retail sales grew 0.1% qoq in Q1, big disappointment
New Zealand retail sales was a big disappointment to the markets. Ex-inflation retail sales volume grew merely 0.1% qoq in Q1, much lower than expectation of 1.0% qoq. That's also a sharp slowdown from Q4's 1.4% qoq. Besides, it's the weakest quarter since 2015.
Stats NZ noted in the release...
Australia & New Zealand Weekly: Wages and Confidence Data Supports Reserve Bank’s More Cautious Aapproach
Week beginning 21 May 2018
Wages and confidence data supports Reserve Bank's more cautious approach.
RBA: Governor Lowe, Assistant Governor Bullock speak.
Australia: Westpac-MI Leading Index, construction work.
NZ: retail sales, trade balance.
Euro Area: consumer confidence.
US: FOMC minutes, durable goods orders, new & existing home sales.
G3:...
Week Ahead – Euro Looks to Flash PMIs for Bounce; Pound Eyes UK CPI and Retail Sales Data
As the US dollar continues to power ahead, the beleaguered euro and pound will be seeking for some reprieve from key economic indicators out of the Eurozone and the United Kingdom next week. With the US calendar being lighter in the coming seven days, the greenback may lose some...
Australia & New Zealand Weekly: Federal Budget 2018 – An Improved Budget Position, but Downside Risks Remain
Week beginning 14 May 2018
Federal Budget 2018: an improved budget position, but downside risks remain.
RBA: RBA minutes, Deputy Governor Debelle speaks.
Australia: Wage price index, employment, Westpac-MI consumer sentiment.
NZ: Federal Budget.
China: retail sales, industrial production, fixed asset investment.
Euro Area: GDP 2nd estimate.
US: retail...
Canadian Dollar Lower after Employment Miss, But US Dollar Even Worse
Canadian dollar drops broadly as employment data missed market section. While it's trading as the weakest one for today, the movement in USD/CAD is rather muted. That's because focus is turning to the greenback again as selling gathers momentum. Weakening treasury yield could be a factor driving the greenback...
Dollar Stabilized from Post CPI Selloff, Sterling also Found Footing
The post CPI selloff in Dollar was relatively shallow and the greenback is regaining some footing today. Similar Sterling stays week after post BoE selling, but loss is so far limited. On the other hand, Canadian Dollar remains the strongest one for the week and stays firm ahead of...
New Zealand BusinessNZ PMI rose to 58.9, highest since Jan 2016
New Zealand BusinessNZ Performance of Manufacturing Index rose to 58.9 in April, up from 53.1. That's also the highest level since January 2016.
BusinessNZ's executive director for manufacturing Catherine Beard:
"The fact that the sub-indexes of production, new orders and deliveries of raw materials were all around the 60-point mark helped...
Dollar Finally Ready for Pullback after Core CPI Miss, Sterling Lower after BoE
Sterling weakens notably after BoE rate announcement. But loss is relatively limited as it's holding above key near term support level against Dollar, Euro and Yen. On the other hand, Dollar is also suffering some selloff today as core CPI missed market expectation. That's a relive for traders that...
RBNZ Leaves Rates On Hold And Lowers Inflation Forecasts
The Reserve Bank of New Zealand left rates on hold at 1.75% earlier with a shift to a more dovish position, adding that the direction of the next rate move is very finely balanced. The Bank lowered its inflation forecast and lengthened its inflation target timeframe. It expects CPI...
Sterling Patiently Awaits BoE Super Thursday, NZD Dived on Dovish RBNZ
Dollar, Sterling and Canadian Dollar remain the strongest three for the week. But is should be noted that the reasons behind the strength are different. The greenback continued to draw support from strength in treasury yields as 10 year yield broke 3% yesterday to 3.004. Fed is also on...
RBNZ Turns Dovish, Downgrading Growth and CPI Forecasts
RBNZ left the OCR unchanged at 1.75% in May. The message delivered by the central bank came in slightly more dovish than expected, sending NZDUSD to a fresh 5-month low. In his first meeting in the capacity of the RBNZ Governor, Adrian Orr made some changes in the policy...
RBNZ downgraded both GDP growth and inflation forecasts
The overall RBNZ monetary policy decision is rather dovish. OCR is left unchanged at 1.75% for a 19th straight month as widely expected. Governor Adrian Orr noted in the statement that growth and employment remain "robust" and near their "sustainable levels". But CPI remains below the 2% mid-point of...
NZD/USD Remains Pressured ahead of RBNZ
As the US dollar took a bit of a breather on Wednesday after a prolonged, three-week rally, kiwi traders were positioning ahead of the Reserve Bank of New Zealand’s rate decision, monetary policy statement, and press conference, all scheduled for Thursday morning in Wellington (Wednesday evening in New York...
Canadian Dollar Strong on Oil Price, Dollar Reversed Gains
Yen remains the weakest one in early US session while strength in oil price is giving Canadian Dollar a strong boost. Dollar, on the other hand, reversed earlier gains and trades broadly lower, except versus Yen. Bullish momentum of the greenback seems to be exhausted ahead of heavy weight...
RBNZ Expected To Leave Rates On Hold At 1.75%
At 12:30 GMT, US Producer Price Index Ex-Food and Energy (YoY) (Apr) is expected to be 2.4% against a previous reading of 2.7%. Producer Price Index (MoM) (Apr) is expected to be 0.2% from 0.3% previously. Producer Price Index Ex-Food and Energy (MoM) (Apr) is expected to be 0.2%...
RBNZ Meeting: New Governor, Same Old Neutral Message?
The Reserve Bank of New Zealand (RBNZ) will announce its rate decision on Wednesday at 2100 GMT. Policymakers are widely expected to remain on hold, so price action will be driven by any changes in the accompanying statement, as well as the updated economic forecasts. While the broader policy...
Dollar Mildly Firmer in Quiet Markets, USD/JPY Pressing Channel Support
The forex markets open the week rather quietly today. Dollar is trading mildly firmer in tight range against other major currencies. Aussie is so far the weakest one today, getting no support from positive business condition and confidence data. Markets could remain quiet today with UK on holiday. The...
RBNZ to stand pat this week, likely throughout 2018 too
RBNZ is expected to keep the official cash rate unchanged at 1.75%.
According to a Reuters poll, all 16 economists surveyed expected RBNZ to stand pat this week. 14 economists expected RBNZ to hold throughout 2018. 8 forecasts RBNZ to hike by the end of Q3 2019.
Sluggish inflation is a...
Australia & New Zealand Weekly: RBA Firmly on Hold as Bank Funding Costs Rise
Week beginning 7 May 2018
RBA firmly on hold as bank funding costs rise.
Australia: Federal Budget 2018, retail sales, housing finance, NAB business survey.
NZ: RBNZ OCR decision, inflation expectations, card spending, house sales & prices.
China: credit growth, trade balance, FDI, CPI.
Euro Area: Sentix investor confidence.
...
Euro and Sterling Recovered on Economic Data, Dollar Patiently Awaits FOMC
Dollar is trading slightly lower today as markets digest recent against ahead of FOMC rate decision and statement. Slightly better than expected ADP employment is shrugged of by the markets. Euro survived the test of GDP data and recovers mildly. Sterling also gets some support from better than expected...