HiFX morning Update, August 9 2018

The NZDUSD opens at 0.6755 (mid-rate) this morning.

The NZD received a boost yesterday afternoon after the latest RBNZ survey showed both near-term and two-year inflation expectations are on the rise. Business managers now expect Q3 inflation to increase to 1.86%y/y an upward revision from 1.8% at the previous survey, while two-year inflation expectations rose marginally to 2.04% from 2.01% three months ago.

This morning the RBNZ are widely expected to keep rates on hold at 1.75% with the tone of this morning’s statement dictating direction for the currency. Following this morning’s announcement the RBNZ Governor Adrian Orr will front the media and address questions at a scheduled press conference.

Overnight an absence of economic data has kept many investors on the side lines with currencies on the whole range bound. The British pound however continues to underperform with Brexit uncertainty weighing heavily on the currency. Earlier this morning the GBP stopped just short of trading at one-year lows against the USD.

Crude oil prices declined sharply overnight with a smaller-than-anticipated drop in US crude stocks and the escalating trade dispute between the US and China sending prices lower. Overnight China announced it would retaliate against the US with a 25% tariff on another $16B worth of US products, including crude exports to China.

Global equity markets are mixed, - Dow -0.13%, S&P 500 +0.05%, FTSE +0.75%, DAX -0.12%, CAC -0.35%, Nikkei -0.08%, Shanghai -1.27%.

Gold prices are edging higher, up 0.3% trading at $1,212 an ounce WTI Crude Oil prices have fallen sharply down 3.6% trading at $66.01 a barrel.
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