HiFX Morning Update, March 12, 2018

HiFX Morning Update, March 12, 2018

The NZDUSD opens at 0.7358 (mid-rate) this morning.

Geopolitical tensions in the Middle East have capped risk appetite and helped push up oil prices to new 3-year highs.

Comments from President Trump saying that the US would respond to the provocation within days if not hours following the latest chemical weapons attack in Syria have overshadowed this morning’s economic data releases.

New Federal Reserve Chairman Jerome Powell had his comments from last month confirmed overnight when the US inflation report failed to meet expectations. Mr Powell was quoted as saying that “there are no clear signs that inflation is accelerating” and this morning’s CPI data release for the month of March was testament to this.

Last night the US labour department reported consumer prices for the month of March edged down by 0.1% following a 0.2% rise in February, it is the first fall in consumer prices since May 2017. Economists had forecast consumer prices to come in unchanged.

The USD which had slipped lower following the inflation report is now retracing the move on the back of slightly “hawkish” FOMC meeting minutes, with all participants agreeing that “the outlook for the economy beyond the current quarter had strengthened in recent months”.

Both UK industrial production and manufacturing output for February disappointed. Industrial growth fell short of expectations with the Office for National Statistics report showing industrial output inched up 0.1% month on month, following on from January’s 1.3% increase, while manufacturing output which had been expected to increase by 0.2%, declined by 0.2%.

Global equity are broadly lower - Dow -0.50%, S&P 500 -0.15%, FTSE -0.13%, DAX -0.83%, CAC -0.56%, Nikkei -0.49%, Shanghai +0.56%.

Gold prices have pushed higher, up 0.7% trading at $1,348 an ounce. WTI Crude Oil prices continue to spike higher, up 2.1% trading at $66.81 a barrel.

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