HiFX morning Update, October 17, 2018

The NZDUSD opens at 0.6591 (mid-rate) this morning.

The NZD has managed to hang onto its gains and is the strongest performing of the G10 currencies following yesterday’s positive inflation report.

Yesterday morning Statistics New Zealand released its Q3 inflation report which showed consumer prices increased by 0.9% on the quarter following on from a 0.4% rise in Q2. The result exceeded market expectations of a 0.7% increase, with annual inflation climbing to 1.9% (exp 1.7%) just shy of the Reserve Bank mid-point target of 2.0%. The NZD spiked higher on the data and in spite of another dip in dairy prices has managed retain its gains.

This morning’s Global Dairy Trade (GDT) auction resulted in a fifth consecutive fall for the index. Following a 1.9% fall in dairy prices at the previous auction a fortnight ago this morning’s auction saw prices edge down by 0.3%.

Industrial production in the US during the month of September increased in line with economists’ forecasts with the Fed reporting production rose by 0.3% following a 0.4% increase in August.

An increase in average weekly earnings excluding bonuses in the UK has helped support the GBP. The Office for National Statistics report showed weekly earnings increase by 3.1% annually, its highest level since Nov 2008. UK unemployment remains at 4% its lowest level in 43-years, while the number of unemployed decreased by 47k in the 3-months to August.

With little in the way of economic data during our trading session investors are likely to await tomorrow morning’s FOMC meeting minutes before adding to their positions.

Global Equity markets are on the rise, - Dow +1.6%, S&P 500 +1.6%, FTSE +0.43%, DAX +1.40%, CAC +1.53%, Nikkei +1.25%, Shanghai -0.85%.

Gold prices are holding steady at $1,226 an ounce. WTI Crude Oil prices are, up 0.8% trading at $71.75 a barrel.

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