HiFX Morning Update, May 3 2018

HiFX Morning Update, May 3 2018

The NZDUSD opens at 0.6995 (mid-rate) this morning.

The US Dollar Index is modestly lower following this morning’s FOMC statement. As expected the Federal Reserve voted 8-0 to keep Fed Funds steady in the target range of 1.50% to 1.75%. Those investors who were hoping for an indication that the current rate curve might have steepened will be disappointed with this morning’s statement. Although the FOMC acknowledged that the 12-month inflation outlook is expected to run near the Fed’s 2% target over the medium term, “the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.”

This morning’s US payroll data was fairly balanced with private sector employment increasing by 204K jobs in April (exp +200K) while the March 241K surge in jobs was downwardly revised to 228K.

Last night’s Euro-zone data underwhelmed with Eurostat reporting the Euro-zone economy expanded by 0.4% in Q1 following on from Q4’s 0.7% expansion.

Euro-zone manufacturing activity slowed in April with Markit announcing its Purchasing Managers' Index fell to a 13-month low of 56.2 in April from 56.6 in March.

Global equity markets remain mixed- Dow -0.02%, S&P 500 +0.05%, FTSE +0.30%, DAX +1.51%, CAC +0.16%, Nikkei -0.16%, Shanghai -0.03%.

Gold prices have retraced yesterday’s fall, up 0.5%, trading at $1,312 an ounce. WTI Crude Oil prices are up 1.0% overnight currently trading at $67.79 a barrel.

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