HiFX Morning Update 17 Jan 2018

The NZDUSD opens at 0.7273 (mid-rate) this morning.

The NZD has edged lower overnight failing to capitalise on this morning’s Global Dairy Trade (GDT) auction result.

The second GDT auction of the New Year has seen the index increase by 4.9% following on from the 2.2% rise at the Jan 2ndevent. There were substantial increases in the Butter, Skim milk powder (SMP) and Whole milk powder (WMP) index’s which were all up more by than 5%. New Zealand dairy farmers will be pleased to see whole milk powder prices back above USD 3,000 a tonne with this morning’s average selling price hitting USD 3,010 a tonne.

UK inflation eased for the first time in 6 months during December, with last night’s Office for National Statistics report showing inflation edged down to 3% from November’s 3.1% reading. Consumer prices increased by 0.4%, as expected for the month, while core inflation which excludes energy, food, alcoholic beverages and tobacco, dipped further than forecast, slowing to 2.5% in December down from 2.7% in November and just shy of the forecast 2.6% result.

Overnight, tonight and on the back of unexpectedly strong employment data and rising inflation the Bank of Canada are widely tipped to raise rates by a quarter-point, from 1.0% – 1.25%. The last time the benchmark rate was above 1.0% was back in December 2008.

Global equity markets with the exception of the FTSE are trading higher - Dow +0.64%, S&P 500 +0.25, FTSE -0.17%, DAX +0.35%, CAC +0.07%, Nikkei +1.00%, Shanghai +0.77%.

Gold prices are down 0.4% to $1,334 an ounce. WTI Crude Oilprices have pulled back overnight, down 1.6% trading at $63.53 a barrel.

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