HiFX Morning Update July 4, 2018

The NZDUSD opens at 0.6756 (mid-rate) this morning.

As news broke that German Chancellor Angela Merkel and her coalition partners had reached a compromise deal on migration policy European equity markets along with risk-linked currencies retraced yesterday’s fall.

This morning the Global Dairy Trade index suffered a steep fall, down 5% from the previous auction a fortnight ago. The fall in the overall index was led by Whole Milk Powder (WMP) prices which plummeted 7.3% to $2,905MT with Skim Milk Powder (SMP) prices also sharply lower, down 4.6% to $1,913MT. A total figure of 26,519MT was sold under the hammer.

The USD is down slightly against its major rivals in what has been a subdued trading session as the US wind down ahead of the July holiday celebrations.

US Treasury yields have moved lower with the 10-year note down 5bps to 2.83% after China pledged to keep its currency stable at 11-month lows against the USD, as trade tensions increase ahead of the July 6th deadline.

The overnight Euro-zone producer price inflation for the month of May hit a 12-month high with Eurostat reporting Industrial producer prices climbed 3.0% y/y in May following on from a 1.9% increase in April.

The UK construction Purchasing Managers' Index increased to 53.1 in June from 52.5 in May. The result was well ahead of the forecast 52.6 reading.

Global equity markets are mixed, - Dow -0.54%, S&P 500 -0.49%, FTSE +0.60%, DAX +0.91%, CAC +0.76%, Nikkei -0.12%, Shanghai +0.41%.

Gold prices have retraced yesterday’s fall, up 0.8% trading at $1,252 an ounce WTI Crude Oil prices are marginally lower, down 0.2% trading at $71.65 a barrel.

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