From the FXWW Chatroom – OVERNIGHT NZDUSD 6743-6805 NZDAUD 9180-9205
TODAY NZDUSD 6780-6820 NZDAUD 9170-9230– A mixed but calm night for many asset classes with little on the data, trade or geo-political front to digest, while Powell’s testimony did not deliver anything ground breaking
– The big dollar was mixed, gains came against a weaker GBP (inflation driven) but offset by stronger emerging markets as Yuan backs away from 1 year lows
– Fed Powell: Another day of testimony with little new in his statements. Discussion on trade continued to dodge political bias and broad strokes of negative long term impacts were painted with tariffs. Uncertainty was also highlighted.
– FED Beige Book noted that manufactures across the US expressed concern on tariffs. The current positive growth momentum was also touched on with unemployment at low levels. Inflation risks continue to linger
– Kudlow (CNBC Interview) discussed trade – China – The ball is in Xi’s court, the additional 200bn is to keep the pressure on, it sounds like he wants to do a deal. Europe – Juncker is rumoured to be bringing an attractive trade offer on 27 July.
– UK Inflation undershot expectations rising 2.4% y/y (mkt: 2.6%; last: 2.4%), core inflation moderating to 1.9% (last/mkt: 2.1%). The odds of an August rate hike has been pared back. The GBP dropped a half percent.
TODAY NZDUSD 6780-6820 NZDAUD 9170-9230– A mixed but calm night for many asset classes with little on the data, trade or geo-political front to digest, while Powell’s testimony did not deliver anything ground breaking
– The big dollar was mixed, gains came against a weaker GBP (inflation driven) but offset by stronger emerging markets as Yuan backs away from 1 year lows
– Fed Powell: Another day of testimony with little new in his statements. Discussion on trade continued to dodge political bias and broad strokes of negative long term impacts were painted with tariffs. Uncertainty was also highlighted.
– FED Beige Book noted that manufactures across the US expressed concern on tariffs. The current positive growth momentum was also touched on with unemployment at low levels. Inflation risks continue to linger
– Kudlow (CNBC Interview) discussed trade – China – The ball is in Xi’s court, the additional 200bn is to keep the pressure on, it sounds like he wants to do a deal. Europe – Juncker is rumoured to be bringing an attractive trade offer on 27 July.
– UK Inflation undershot expectations rising 2.4% y/y (mkt: 2.6%; last: 2.4%), core inflation moderating to 1.9% (last/mkt: 2.1%). The odds of an August rate hike has been pared back. The GBP dropped a half percent.
– US Housing starts and building permits came in weaker than expected with starts falling 12.3% m/m in June and permits down 2.2%. This is a sharp correction following the strong gains the previous month.
– Equities – Marginally stronger across the board (S&P +0.2%, EuroStoxx +0.8%), led by gains in industrials and Financials. Morgan Stanley bumper earnings while Facebook received a EUR4.3Bil fine from EUs Antitrust Police, FB plans to appeal.
– Goldman Sachs is at the hawkish end of spectrum, predicting a Feb OCR hike from the RBNZ. They suggest Tuesdays inflation figures are consistent with NZ late-cycle growth story. ANZ forecasts the first hike in November 19.
– Ahead Today: There is no data out in New Zealand. In Australia, labour market data and business confidence are out.
– NZDUSD ground back toward 68 cents overnight but nothing to see here as we remain tightly range held. Positioning and pricing playing tug-o-war with global and domestic growth fears. 6740-50 support, but likely need a break above 6850-60 resistance to spook shorts. NZDAUD also consolidating but continue to see risk of a short term spike, however we need to get through the lottery of AU Labour data today.
– Equities – Marginally stronger across the board (S&P +0.2%, EuroStoxx +0.8%), led by gains in industrials and Financials. Morgan Stanley bumper earnings while Facebook received a EUR4.3Bil fine from EUs Antitrust Police, FB plans to appeal.
– Goldman Sachs is at the hawkish end of spectrum, predicting a Feb OCR hike from the RBNZ. They suggest Tuesdays inflation figures are consistent with NZ late-cycle growth story. ANZ forecasts the first hike in November 19.
– Ahead Today: There is no data out in New Zealand. In Australia, labour market data and business confidence are out.
– NZDUSD ground back toward 68 cents overnight but nothing to see here as we remain tightly range held. Positioning and pricing playing tug-o-war with global and domestic growth fears. 6740-50 support, but likely need a break above 6850-60 resistance to spook shorts. NZDAUD also consolidating but continue to see risk of a short term spike, however we need to get through the lottery of AU Labour data today.
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