HiFX Morning Update - October 19 2016

HiFX Morning Update - October 19 2016

NZDUSD 0.7201 1.0%
NZDEUR 0.6555 1.1%
NZDGBP 0.5851 0.1%
NZDJPY 74.81 1.0%
NZDAUD 0.9393 0.5%
NZDCAD 0.9445 0.9%

The NZDUSD opens at 0.7201 (mid-rate) this morning.

The NZD has pushed higher against all its major rivals following yesterday’s inflation report and this morning’s Global Dairy Trade auction.

Consumer prices in New Zealand gained 0.2% in Q3 exceeding economists’ forecasts of a flat result following an increase of 0.4% in Q2. On an annual basis prices were up 0.2% (exp 0.1%) and down from 0.4% in the preceding quarter.

This latest GDT auction snapped a two successive auction decline with the index edging up 1.4%, while wholemilk powder (the major contributor to Fonterra’s payout forecast) rose 2.9% to $2760 per tonne. As expected, due to a wetter than usual spring volumes were down by 7.1%from the previous auction with a total of 31,525 tonnes going under the hammer.

Overnight US consumer prices for September increased in line with economists’ estimates. The latest Labour Department report showed the index climbed by 0.3% in Sept after rising by 0.2% in August.

The weakening British Pound has seen UK inflation spike to its highest level in nearly 2 years, with inflation in September rising to 1% up from 0.6% in August. Economists’ had expected the index to rise to 0.9% still well below the Bank of England’s target of 2%.

The highlight of our trading day will be China’s quarterly/yearly GDP data release due to hit the tapes at 15:00, with the expectation of an unchanged 6.7% print.

Global equity markets are all positive - Dow +0.48%, S&P 500 +0.73%, FTSE +0.76%, DAX +1.22%, CAC +1.32%, Nikkei +0.38%, Shanghai +1.40%.

Gold prices are up 0.4% currently trading at $1,261 an ounce, WTI Crude Oil has edged higher currently up 0.7% at $50.08.

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