HiFX morning Update, February 13 2019

NZDUSD opens at 0.6732 (mid-rate) this morning.

Optimism over US-China trade talks and easing fears about another US government shutdown has fuelled investors' appetite for riskier assets.

President Donald Trump announced overnight that he would consider extending the March 1st deadline to close a trade deal before raising tariffs on Chinese products. With the third round of trade negotiations about kick-off Trump stated "If we're close to a deal ... I could see myself letting that slide for a little while."

Lead Republican negotiator Richard Shelby, R-Ala said negotiators had reached a tentative agreement on border security. The agreement reportedly includes $1.3 billion for physical barriers on the border with Democrats also agreeing to drop their demand to reduce the number of illegal immigrants who can be detained by Immigration and Customs Enforcement. Although the funding is well short of the 5.7 billion Trump had demanded, it is believed to be enough to avoid another government shutdown.

The Australian dollar received a boost yesterday afternoon following a better-than-expected Business Confidence report. The NAB reported its conditions index rose 4 points to +7 in January following a sharp in December.

This afternoon market expectations are for the RBNZ to deliver a “dovish” statement and follow in the footsteps of the BOE, RBA and the ECB in downwardly revising our growth forecasts. The statement will be released at 2:00pm with a press conference to follow at 3:00pm.

Overnight, tonight investors will be focused on inflation data releases out of both the UK and the US.

Global equity markets have continued to push higher, Dow +1.28%, S&P 500 +1.18%, FTSE +0.06%, DAX +1.01%, CAC +0.84%, Nikkei +2.61%, Shanghai +0.68%.

Gold prices are unchanged at 1,309 an ounce. WTI Crude Oil prices have surged higher, currently up 3.5% trading at $53.87 a barrel.

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