HiFX Morning Update, March 14 2018

HiFX Morning Update, March 14 2018

The NZDUSD opens at 0.7341 (mid-rate) this morning.

The Kiwi is the best performer of the G10 currencies overnight, setting a 2 week high against the USD, and rallying strongly against the Canadian Dollar and the Japanese Yen

U.S. Consumer Prices continued to firm in February, indicating inflation is creeping up toward the Federal Reserve's target without the kind of breakout that would warrant a faster pace of interest-rate hikes. Both the main consumer price index and the core gauge, which excludes food and energy, rose 0.2 percent from January, matching the median estimates of economists.

The U.S. CPI was up 2.2% in the 12 months through February, compared with 2.1% in January, while the core index increased 1.8% from a year earlier for a third month. That’s in line with policy makers’ outlook for price gains steadily approaching their goal and officials’ projection for three quarter-point interest-rate hikes this year, including one anticipated at the Fed’s meeting next week.

UK’s annual budget release overnight showed the UK has lifted its 2018 economic growth forecast to 1.5%, and inflation falling to the Bank of England target with a year.

China is merging its banking and insurance regulators, giving new powers to policymaking bodies such as the central bank and creating new ministries in the biggest government shake-up in years. The revamp is a cornerstone of President Xi Jinping’s agenda to put the leadership of the ruling Communist Party squarely at the heart of policy with Xi himself at the core of the party. The economy and the party have become ever more intertwined since a party congress in October when Xi consolidated his grip on power, with party control deemed necessary to help push through reforms.

Bank of Canada’s Governor’s Poloz stated overnight that recent data has been in line with the BOC’s outlook but he doesn’t know when interest rates may go up again. There has been an acceleration in wage growth consistent with the BOC’s framework. The CAD weakened 0.75% against the USD and 1.5% versus the NZD.

US President Trump fired Rex Tillerson as Secretary of State and announced Mike Pompeo, Director of the CIA as his replacement. Gina Haspel will become the new Director of the CIA, the first woman to attain this position.

Global equity markets are lower except Japan: Dow -0.18%, S&P 500 -0.35%, FTSE -1.05%, DAX -1.59%, CAC -0.64%, Nikkei -+0.66%, Shanghai -0.49%.

Gold prices are up 0.5% or $7 currently trading at $1,327 an ounce. WTI Crude Oil prices fell 1.2% currently trading at $60.43 a barrel.

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