HiFX Morning Update, May 25 2018

HiFX Morning Update, May 25 2018

NZDUSD opens at 0.6932 (mid-rate) this morning.

The Kiwi was range-bound yesterday, and without any meaningful economic or geopolitical news, price action was unable to trade outside of a 0.6905 - 0.6935 range. This was the tightest daily range of the week, which was a theme echoed across all the major pairs.

Of some interest was news that Donald Trump decided to cancel the historic summit with North Korean Leader Kim Jong Un. President Trump cited the fact that North Korea had displayed "tremendous anger and open hostility", leading him to pen a letter to the Supreme Leader expressing his belief that it would be inappropriate to hold the planned meeting in Singapore on June 12th.

All of this seemed to stimulate a very gentle, albeit short-lived risk-off tone in the markets, most evident in equity markets. Despite trading almost 1% off the highs in response to the above news, US indices managed to bounce back strongly are now only modestly in the red for the day, although the other major averages remain firmly in negative territory.

U.S. economic date overnight was on the soft side, with unemployment claims coming in higher than expected at +234k, vs +220k expectation. Existing Home Sales came in well below forecasts at 5.46 million, 2.5% below the markets expectation of 5.56M. This seemed to set the USD on the back foot for the session, weakening somewhat against all of the majors with the exception of the Canadian Dollar which was driven lower by a sell-off in Oil.

Oil prices took a hit overnight, trading 1.65% lower as we speak at $70.66 a barrel.

Data points worth watching tonight include US Core Durable Goods and UK Second Estimate GDP, and of note we have US Fed Chair Powell speaking, as well as the Bank of England's Governor Carney.

Global equities: Dow -0.3%, S&P 500 -0.2%, FTSE -0.9%, DAX -0.8%, CAC -0.2%, Nikkei -1.1%, Shanghai +0.3%.

Gold prices are largely unchanged overnight at $1,289 an ounce.

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