HiFX Morning Update, March 19 2018

HiFX Morning Update, March 19 2018

The NZDUSD opens at 0.7215 (mid-rate) this morning.

The NZD along with the AUD continues to underperform with ongoing concerns over US trade policy weighing on sentiment.

On Friday an unexpected downward revision to Euro-zone inflation will make it very difficult for the ECB to end its bond-buying program and raise its interest rate. The data release showed inflation for the month of February at 1.1% down from an earlier estimate of 1.2% and well below the ECB’s goal of just under 2%.

US consumer sentiment and industrial production both printed ahead of expectations countering a very poor housing starts data release. The University of Michigan preliminary consumer sentiment report for March has the index at 102.0 up from February’s final reading of 99.7 and well ahead of the expected 99.3 reading. US industrial production for February surged 1.1% following a downwardly revised 0.3% fall in January. Economists had expected production to increase by 0.3%. Countering these better than expected data releases was an unexpected sharp pullback in new residential construction during February, with the Commerce Department report showing housing starts fell by 2.7% from January’s final reading.

The week ahead will be dominated by Thursday’s FOMC meeting with new Federal Reserve Chairman Jerome Powell widely expected to raise its benchmark interest rate. As of this morning the market is pricing in 95% of an expected 0.25% hike.

Global equity markets closed out the week mixed, - Dow +0.29%, S&P 500 +0.17%, FTSE +0.34%, DAX -0.07%, CAC +0.36%, Nikkei -0.58%, Shanghai -0.65%.

Gold prices edged lower on Friday, down 0.4% closing out the week at $1,313 an ounce, WTI Crude Oil prices pushed higher on Friday, up 1.9%, on the day to close out the week back above $62.00 a barrel.

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