HiFX Morning Update, February 7 2018

HiFX Morning Update, February 7 2018

The NZDUSD opens 1.0% lower at 0.7311 this morning since Monday’s open.

Turbulent global markets have spooked investors and the Kiwi is down over 1% against the USD and Yen, but up almost 1% against the GBP, AUD and CAD.

Monday night saw the Dow drop 4.22% which was the biggest one day fall in 6 years, and was down over 2% last night but it has since recovered to be just in positive territory.

Bitcoin after falling 10% Thursday, 10% Friday and 15% Monday to $5920 its lowest since mid-November, recovered to above $7250 up roughly 6% Tuesday.

The RBA left the cash rate unchanged at a record low of 1.5% yesterday afternoon as expected, marking 18 months without a change. There has not been an official cash rate increase since November 2010 and economists and experts widely predict rates to remain on hold throughout most of this year.

Retail Sales in the Eurozone increased for the tenth time in as many months during January, the longest period of growth in the series history. That said, the rate of growth slowed, reflecting softer increases in Germany and France, while a decline was evident in Italy. The headline IHS Markit Eurozone Retail PMI fell to 50.8 in January from 53.0 in December.

The US trade deficit swelled in December, and the $53.1 Billion shortfall was a slightly larger than expected. It was the largest deficit since October 2008. For 2017, the US recorded a trade deficit of goods and services of $566 Billion, the largest since 2008.

The U.S. IBD/TIPP Economic Optimism Index, a leading national poll on consumer confidence, increased in February to its highest level in more than 13 years. The overall Economic Optimism reading rose from 55.1 to 56.7, up 2.9%.

The Global Dairy Trade Price Index was up 5.9% compared with 4.9% last month.

Global equity markets are sharply lower except the US: Dow +0.07%, S&P500 -0.13%, FTSE -2.64%, DAX -2.32%, CAC -2.35%, Nikkei -4.73%, Shanghai -3.35%.

Gold prices are down $11 or 0.8% to USD$1,327 an ounce. Oil prices (WTI) are flat currently trading at USD$63.90 per barrel.

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