HiFX morning Update, August 1 2018

The NZDUSD opens at 0.6819 (mid-rate) this morning.

The Yen is the weakest performer over the past 24hrs after the BOJ maintained its target for the 10-year government bond yield at around 0.0% and the short-term interest rate target at minus 0.1%. The Yen had made steady gains over the past week with yield on the 10-year-note hitting a six-month high on Monday on speculation that the central bank were about to make major changes to current policies.

Overnight the US Commerce Department reported personal income and spending both increased in line with economist estimates in the month of June. The report showed personal income climbed by 0.4% in June while personal spending also rose by 0.4% in June with May’s result upwardly revised from 0.2% to 0.5%.

Yesterday afternoon a rallying NZD hit a speed bump after data revealed a sixth consecutive monthly decline in business confidence during July with the gauge now sitting at 10-year lows.

Direction for the NZD will be driven by this morning’s Q2 employment report with employment expected to have risen by 0.4%, following a 0.6% increase in Q1, while the unemployment rate is expected to remain at 4.4%.

New Zealand’s the labour cost index is forecast to have increased by 0.6% in Q2 following a 0.3% rise in Q1, this would put annualised wage growth at 2.1%.

Global equity markets are positive after Bloomberg reported that representatives for US Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He are having private conversations in an effort to avert a full-blown trade war.

Global equity markets are broadly higher, - Dow +0.59%, S&P 500 +0.60%, FTSE +0.62%, DAX +0.06%, CAC +0.37%, Nikkei +0.04%, Shanghai +0.26%.

Gold prices are little changed trading at $1,224 an ounce WTI Crude Oil prices have given back yesterday’s gains, down1.8% trading at $67.82 a barrel.

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