HiFX Morning Update, October 16, 2017

HiFX Morning Update, October 16, 2017

The NZDUSD opens at 0.7175 (mid-rate) this morning.

We open this morning with the USD on the back foot after Friday’s US inflation data fell short of economists’ projections cutting the odds of a December rate hike.

Consumer prices in the U.S. which were boosted by rising oil prices increased by 0.5% in September (exp +0.6%) while core CPI (which excludes food and energy prices) edged up by 0.1% (exp +0.2%), the USD fell sharply on the announcement.

US retail sales spiked higher in September, up 1.6% compared to a 0.2% fall in August. Economists had expected retail sales to increase by 1.7% with car sales surging 3.6% as vehicles lost to hurricanes were quickly replaced.

Consumer sentiment in the US increased significantly in October with the University of Michigan consumer sentiment index spiking to 101.1 after pulling back to 95.1 in September. The index had been expected to edge down to 95.0.

The key domestic drivers for the NZD during the week ahead will be the announcement of the makeup of our new Government, possibly as early as tonight and tomorrow morning’s quarterly inflation report.

Global equity markets closed out the week mixed - Dow +0.13%, S&P 500 +0.08%, FTSE -0.28%, DAX +0.07%, CAC -0.17%, Nikkei +0.96%, Shanghai +0.13%.

Gold prices edged higher on Friday, up 0.8% closing out the week at $1,304 an ounce, WTI Crude Oil prices surged higher on Friday, up 1.5%% closing out the week at $51.45 a barrel, for a weekly 4% gain.

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