HiFX Morning Update, December 5 2016

HiFX Morning Update, December 5 2016

NZDUSD 0.7125 0.5%
NZDEUR 0.6685 -0.1%
NZDGBP 0.561 -1.3%
NZDJPY 80.87 -0.1%
NZDAUD 0.9565 -0.2%
NZDCAD 0.9479 -0.3%

The NZDUSD opens at 0.7125 (mid-rate) this morning.

Broad USD weakness following Friday’s payroll report has helped push the NZD back above 71 US cents. Although the report showed that jobs increased by more than expected (178k jobs Vs expected 170k jobs) and unemployment fell by 0.3% to a nine year low of 4.6%, in was the lack of wage price inflation that hurt the USD. Economists had expected to see average hourly earnings increase by 1.1% in November and were forecasting wage growth to hit 2.8% y/y, so it was somewhat of a shock to the market when the report showed average hourly earnings fell by 0.1% leaving wage growth at 2.5%y/y.

The British Pound was the best performing currency on Friday after the UK construction sector continued to rebound. The November Purchasing Managers' Index unexpectedly rose to 52.8 from 52.6 in October, economists had expected the index to fall to 52.2.

Today investors will be following the critical Italian constitutional referendum, with current Prime Minister Matteo Renzi threatening to resign on a “No vote”. Earlier this morning the Euro-zone received a boost after the Austrian far-right candidate Norbert Hofer conceded defeat to the pro-Europe Green party leader Alexander Van der Bellen.

Global equity markets softened on Friday - Dow -0.11%, S&P 500 +0.04%, FTSE -0.33%, DAX -0.20%, CAC -0.70%, Nikkei -0.47%, Shanghai -0.90%.

Gold prices gained 1.0% on Friday to close out the week at $1,176 an ounce WTI Crude Oil spiked 12% over the course of the week closing on Friday at $51.68 a barrel.

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