HiFX Morning Update, May 20

HiFX Morning Update, May 20

The NZDUSD opens at 0.7345 (mid-rate) this morning.

The NZDUSD rallied to a high of 0.7440 after the Reserve Bank's survey of inflation expectations showed firms raised their projections for consumer prices over the next two years. As expected the Fonterra Auction disappointed yet again with GDT Price Index dipping 2.2 % (3.5% from the previous sale) with a total volume of 26,535 tonnes (down 3% from the previous auction) and this coupled with a strong U.S housing number sees the NZDUSD open this morning at 0.7345.

In what has become somewhat of a rarity of late, last night’s US data release came in well ahead of market expectations. The U.S housing starts jumped to a seven year high in April up 20.2% to an annual rate of 1.135 million in April from the revised March estimate of 944,000 (exp 1.029mio, march previously 926k).

The data out of both Europe and the UK over the past 24hrs doesn’t make for pretty reading with German economic sentiment now at a 5 month low falling sharply from 53.3 in April to 41.9. While UK CPI y/y surprised the market and turned negative (deflation) for the first time since 1960.

Global equity markets continue to push higher - Dow +0.15%, Nikkei+0.68%, Shanghai +3.13%, FTSE +0.38%, DAX +2.23%, CAC +2.09%

Gold prices are down $18 at $1207 an ounce, Oil (WTI) is down 3.7% at $57.25 barrel

The current indicative mid-rates are:

NZDUSD 0.7345
NZDEUR 0.6585
NZDGBP 0.4740
NZDJPY 88.70
NZDAUD 0.9280
NZDCAD 0.8978

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