HiFX Morning Update, April 13, 2018

HiFX Morning Update, April 13, 2018

The NZDUSD opens at 0.7381 (mid-rate) this morning.

The Kiwi marched higher overnight against all the major currencies except the GBP, as tensions around Syria eased, and risk appetite improved.

The NZDUSD has traded a 121 point or 1.66% range this week, with a breach of 0.7400 imminent. Above that the January 24th and February 16th high of 0.7437 forms a double top and a near term resistance target. The 200 moving day average is at 0.7180

The European Central Bank Monetary Policy Makers met last month and discussed the potentially harmful impact of the Euro’s strength and other risks from the U.S. trade wars, the minutes of the meeting showed.

As the ECB reduce their bond buying program, which depressed borrowing costs, kick started growth and aided the threat of deflation, investors are wondering what the full impact from the trade war with the U.S and China will be, and how that will affect the ECB’s exit plan. The near 2% inflation target for the ECB will undershoot as inflation will remain weak for probably years to come.

Euro area Industrial Production unexpectedly declined for the third consecutive month, continuing the run of softer activity data from the region. Euro area Industrial Production fell 0.8% when the market was expecting an increase of 0.1%

New applications for U.S. Unemployment benefits fell last week, pointing to sustained labour market strength despite a sharp slowdown in job growth in March. U.S. Initial claims for state unemployment benefits dropped 9k to a seasonally adjusted 233k for the week ended April 7.

U.S. Import Prices were flat in March, below expectation for a 0.2% increase, and following a 0.3% increase from February. U.S. Export Prices were 0.3% higher in March after rising 0.2% in February and 0.8% in January.

Overnight data tonight includes US preliminary University of Michigan Consumer Sentiment and Inflation expectations, and Euro Trade Balance

Global equity are higher except Asia: Dow +1.48%, S&P 500 +1.04%, FTSE +0.02%, DAX -+0.98%, CAC +0.59%, Nikkei -0.12%, Shanghai -0.12%.

Gold prices are down $12 or 0.9% trading at $1,336 an ounce. WTI Crude Oil prices continue to push higher, up 0.5% trading at $67.13 a barrel.

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