HiFX morning Update, January 31 2019

The NZDUSD opens at 0.6836 (mid-rate) this morning

The AUD has outperformed all its major rivals after yesterday’s Q4 inflation data printed marginally ahead of expectations.

As reported yesterday the Australian Bureau of Statistics reported that the consumer price index which was expected to increase by 0.4% in the December quarter, rose 0.5%. Year on year the CPI increased by 1.8%, again just ahead of the forecast 1.7% print.

Overnight US payroll processor ADP reported private sector employment added 213k jobs in January following a downwardly revised 263,000 jobs in December. Although the data report shows a slowing down in private sector job growth, the result far exceeded economists’ estimates of an increase of 178k jobs following Decembers previously reported 271k jobs increase.

US equity markets are reacting positively to the latest earnings reports from two of its big name companies, with Apple and Boeing both reporting better than expected fourth quarter results.

Yesterday morning UK lawmakers voted to support Theresa May's Withdrawal Agreement which includes making the Northern Irish backstop time-limited or removed from the agreement entirely. MP’s also voted against an amendment to the EU Withdrawal Bill which would have enabled MPs to force the government into requesting an extension of the Article 50 Brexit countdown, investors have viewed this as a positive with the pound more than holding its own against the majors.

A smaller-than-anticipated jump in US crude inventories along with an unexpected drop in gasoline stockpiles and concerns about supply disruptions following US sanctions on Venezuela's oil industry has seen crude oil prices extend their recent gains.

All eyes this morning will be on Fed Chairman Jerome Powell and his forward guidance on future interest rate hikes. As announced last year Chair Powell will this morning debut the Federal Reserve’s latest communications strategy which is to hold a press conference after every monetary policy meeting.

Global equity markets remain mixed, Dow +1.48%, S&P 500 +0.97%, FTSE +1.58%, DAX -0.33%, CAC +0.95%, Nikkei -0.52%, Shanghai -0.72%.

Gold prices are little changed at 1,310 an ounce. WTI Crude Oil prices have continued to rise , currently up 2.5%% trading at $55.02 a barrel.

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