HiFX morning Update, August 6 2018

The NZDUSD opens at 0.6742 (mid-rate) this morning.

Friday’s US non-farm-payrolls came up short of expectations in July, however upward revisions to both May and June’s results more than made up for the July shortfall.

The Labour Department report showed non-farm payroll employment increased by 157k jobs in July, well shy of the expected 190k increase, but upward revisions to both May and June totalling 59K jobs countered the disappointing July number and supported the USD. The report also showed an expected slight decrease in unemployment which edged down to 3.9% from 4.0% in June.

The US Institute for Supply Management reported service sector activity slowed by much more than forecast in the month of July, with the non-manufacturing index falling to 55.7 in July after rising to 59.1 in June. Economists had expected the index to inch down to 58.6.

Euro-zone retail sales increased for the second consecutive month in June rising by 0.3%, with the bulk of the increase coming in food sales. Economists had forecast sales to increase by 0.4%.

Trade tensions between China and the US are likely to dominate markets during the week ahead with Trump last week threatening a further 25% tariff on $US200b worth of Chinese goods and China on Friday responding with the threat of imposing tariffs ranging from 5% to 25% on US$60b worth of US imports.

Local economic highlights this week will be Wednesday’s quarterly inflation expectations and Thursday’s RBNZ monetary policy statement.

Global equity markets closed out the week broadly higher on Friday, - Dow +0.54%, S&P 500 +0.46%, FTSE +1.10%, DAX +0.55%, CAC +0.33%, Nikkei +0.06%, Shanghai -1.00%.

Gold prices edged lower on Friday down 0.3% closing out the week at $1,213 an ounce. WTI Crude Oil prices fell 2.4% on Friday, to close out the week at $67.35 a barrel.

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