HiFX Morning Update, May 31 2018

HiFX Morning Update, May 31 2018

The NZDUSD opens at 0.6987 (mid-rate) this morning.

Reports that Italy's two largest political parties are in talks to agree a new government and avoid a possible snap election has seen yield on Italian treasuries start to reverse yesterday’s move with yield on the 2-year note down 100 basis points.

Disappointing US economic data is putting further pressure on the USD with the Commerce Department reporting US economic growth for Q1 came in at an annualised pace of 2.2%, down from 2.9% in Q4 and below the initial estimate of a 2.3% reading.

Adding to the disappointment the ADP private sector employment increased by 178k jobs in May (exp 190K) with April’s previously reported 204k jobs increase downwardly revised to 163k.

German retail sales surged in April, increasing by 2.3% following on from a 0.4% fall in March. Economists had expected sales to increase by 0.5%.

Euro-zone economic sentiment sank to a 9-month low with the European Commission reporting the index dipped to 112.5 in May down from 112.7 in April but ahead of the expected 112.0 result.

Crude oil prices are advancing on the back of strong demand and a weaker USD.

Global equity are mixed- Dow +1.25%, S&P 500 +1.37%, FTSE +0.75%, DAX +0.93%, CAC -0.20%, Nikkei -1.52%, Shanghai -2.53%.

Gold prices have edged lower, down 0.2% trading at $1,301 an ounce. WTI Crude Oil prices have bounced, up 2.6% overnight to at $68.18 a barrel.

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