HiFX Morning Update, February 8 2018

HiFX Morning Update, February 8 2018

The NZDUSD opens lower at 0.7251 this morning.

The NZ Employment data surprised the market yesterday morning pushing the NZDUSD 30-40 points higher initially but the Kiwi gave up the gains overnight and more, on broad US Dollar strength. NZ Employment change q/q was 0.5% ahead of the 0.4% expected and the Employment Rate fell to 4.5% from 4.6% and economists were expecting a rise to 4.7%.

The RBNZ’s rate announcement and Monetary Policy statement is at 9am this morning. They are widely expected to leave rates unchanged at 1.75%. The RBNZ press conference is at 10am.

UK Annual House Prices rises have slowed from 2.7% in December to 2.2% in January - the lowest rate since July last year. Not only was there a monthly decline but the quarterly rate of growth has also flattening out. Although employment levels grew by 102,000 in the three months to November, household finances are still under pressure as consumer prices continue to grow faster than wages.

The European Commission said overnight that the Euro-area economy will expand faster than previously anticipated this year and next, though it offered little comfort to the region’s central bank, saying inflation is expected to remain subdued. It sees expansion of 2.3% in 2018, up from 2.1% predicted in November and close to the decade-high rate reached in 2017.

The 2019 forecast was upgraded to 2%, meaning the outlook is broadly in line with the most recent projections from the European Central Bank and International Monetary Fund. The EUR/USD is down 150 basis points or 1.15% in response.

Canadian municipalities issued $8.1 billion in building permits in December, up 4.8% following a 7.3% decline in November. The December increase stemmed from higher construction intentions in the residential sector.

Oil prices fell 3.9% overnight after the U.S. Energy Information Administration reported that domestic crude supplies rose 1.9 million barrels for the week ended Feb. 2 well worse that the forecast for a rise of 2.8 million barrels.

Global equity markets are higher except the China and the S&P500: Dow +0.39%, S&P500 -0.25%, FTSE +1.93%, DAX +1.60%, CAC +1.82%, Nikkei -+0.16%, Shanghai -1.82%.

Gold prices are down $12 or 0.9% to USD$1,315 an ounce. Oil prices (WTI) are sharply lower, down 3.9% at USD$61.41 per barrel.

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