HiFX Morning Update, May 13 2016

HiFX Morning Update, May 13 2016

NZDUSD 0.6821 -0.2%
NZDEUR 0.5997 0.3%
NZDGBP 0.4720 -0.1%
NZDJPY 74.42 0.4%
NZDAUD 0.9305 0.5%
NZDCAD 0.8747 -0.3%

The NZDUSD opens at 0.6821 (mid-rate) this morning.

The NZD drifted sideways overnight with a slight negative tone.

The Bank of England cut its growth forecasts and issued its strongest warning yet that a vote to leave the European Union would hurt the economy. With just six weeks to go until Britain’s referendum, the nine-member Monetary Policy Committee, led by Governor Mark Carney, said there were more signs it was weighing on growth and clouding the outlook. Officials unanimously agreed to maintain their benchmark rate at a record-low 0.5 %.

“A vote to leave the EU could have material effects on the exchange rate, demand and supply potential,” Carney told a press conference in London. The consequences “could possibly include a technical recession.”

A recession is normally defined as two consecutive quarters of economic contraction. The governor said the BOE isn’t making a long-term assessment of the consequences. And they left the asset purchasing facility at 375 billion

U.S. Unemployment claims were 294k for the week ending 7th May. That was worse than the 277k expected and the 274k unrevised last reading.

U.S. Import prices rose 0.3% in April following a 0.3% increase in March. The increases in both March and April were led by higher fuel prices and were the largest increases since a 1.1% rise in May 2015. U.S. export prices increased 0.5% in April, after recording no change the previous month.

Overnight we have U.S. Retail Sales, PPI, Business inventories and the University of Michigan Consumer Sentiment, and for China Industrial Production, Fixed asset Investment, Retail Sales, Money Supply and New Loans.

Global equity markets are mixed: Dow +0.30%, S&P 500 +0.23%, FTSE -0.95%, DAX -1.13%, CAC -0.54%, Nikkei +0.41%, Shanghai -0.04%.

Gold prices are down $6 currently trading at $1270 an ounce, WTI Crude Oil has continued to rise currently up another 1% trading at $46.47 a barrel.

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