HiFX morning Update, August 16 2018

The NZDUSD opens at 0.6567 (mid-rate) this morning.

The Kiwi traded sideways for most of the overnight session with broad risk off sentiment still dominating markets. Global equities, oil and bond yields all retreating reflected this mood.

The Turkish Lira strengthened again following an announcement that Qatar would commit $15b of direct investment to the country but emerging markets on the whole remained out of favour. USD/CNY continues its accent rising to 6.93 (recent highs). The USD and JPY remain the safe haven currencies of choice.

Elsewhere overnight we saw UK inflation accelerate for the first time in 8 months boosted by the cost of auto fuel, transport costs, computer games and food. Annual consumer-price growth quickened to 2.5 percent from 2.4 percent in June, as economists forecast, figures from the Office for National Statistics Wednesday show. The Bank of England had predicted inflation would pick up to 2.6 percent in July before resuming its downward path as the effect of sterling’s post-Brexit referendum decline fades.

U.S. retail sales also rose more than expected in July as households boosted purchases of motor vehicles and clothing, suggesting the economy remained strong early in the third quarter. Other data on Wednesday showed manufacturing output rising steadily last month and worker productivity growing at its fastest pace in more than three years in the second quarter, though a drop in labour costs pointed to moderate wage inflation.

Australians unemployment number at 1:30pm is the main piece of local data to watch out for today.

Global equity markets are sharply lower, - Dow -0.5%, S&P 500 -0.8%, FTSE -1.4%, DAX -1.6%, CAC -1.8%, Nikkei -0.7%, Shanghai -2.1%.

Gold prices fell 1.5% to USD$1,175 an ounce. WTI Crude Oil prices also dropped 1.5% to trade at USD$64.93 a barrel.

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