HiFX Morning Update, October 20, 2017

HiFX Morning Update, October 20, 2017

NZDUSD 0.7017 -1.8%
NZDEUR 0.5926 -2.1%
NZDGBP 0.5331 -1.5%
NZDJPY 78.97 -2.1%
NZDAUD 0.8913 -2.1%
NZDCAD 0.8755 -1.7%
GBPNZD 1.8748 0.4%

The NZDUSD opens at 0.7017 (mid-rate) this morning.

After almost a four week wait since the 23rd September NZ Election a decision has been made by Mr Peters, NZ First leader to form a coalition government with Labour (and the Greens). The new Prime Minister Jacinda Ardern becomes the youngest female Prime Minister of all time.

After posting a 0.7171 high in the NZDUSD yesterday, the Kiwi was trading around 0.7070 immediately before announcement by Mr Peters to make Ms Ardern the 40th Prime Minister of New Zealand for the 52nd NZ parliament. The Kiwi had fallen 55 points from around 0.7125 in the two hours leading up to the announcement and traded to a low of 0.7012 overnight and practically flat lining over the last 7 hours

The lower Kiwi will be welcome relief for NZ exporters. We were last trading at these levels on May 26th 2017, and once 0.7000 breaks it would open up a retest of 0.6800 (0.6814 was the May 10th low)

The number of Americans filing for unemployment benefits fell to its lowest level in more than 44 years last week, pointing to a rebound in job growth after a hurricane-related decline in employment in September. Initial claims for state unemployment benefits dropped 22,000 to a seasonally adjusted 222,000 for the week ended Oct. 14, the lowest level since March 1973.

The US Manufacturing Business Outlook Survey suggests that firms remained optimistic about future growth. The index for current manufacturing activity in the region increased 4 points to a reading of 27.9 and is now at its highest reading since May.

UK Retail Sales increased 0.6% in September, but fell 0.8% when compared with August. Year on year the retail sector increased 1.2%. Store prices continue to rise across all store types and are at their highest year-on-year price growth since March 2012 at 3.3%

Global equity markets are a sea of red except Japan: Dow -0.07%, S&P 500 -0.10%, FTSE -0.26%, DAX -0.41%, CAC -0.29%, Nikkei +0.40, Shanghai -0.34%.

Gold prices are up $7 or 0.5% currently trading at $1,287 an ounce. WTI Crude Oil prices gave up yesterday’s gains to be down 1.3% overnight currently trading at $51.36 a barrel.

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