The NZD opens at 0.6359
In what is shaping up to have more excitement than a Bachelor finale, the US China Phase One trade deal looks to be back
on. This was originally looking good early in the week, but fears the deal was falling apart started to increase
yesterday. Initial optimism from both parties turned to questions over whether tariffs would be wound back, then
foreboding silence. Thankfully we look to be back on today, first with a headline that China would be willing negotiate
on how many tariffs would be cancelled, then on the US confirming the deal would indeed include tariff roll backs. This
had led to a broad risk on move, with a lot of US Stock indices breaking to all-time highs.
What hasn’t quite joined the party though is the NZD. This is because the odds of an interest rate cut for next
Wednesday have drifted up from 50% a few days ago, to 75% currently. This has negated a lot of the risk on move that you
would expect. Remember as well, that the more a cut gets priced in, the less a drop we would expect if they finally cut,
and the larger the bounce we would expect if they keep rates on hold.
At 1:30 this afternoon we have the RBA out with their Monetary Policy Statement though no major change in tone is really
expected, from an accommodative hold.
Global equity markets are up across the board, - Dow +0.87%, S 500 +0.61%, FTSE +0.13%, DAX +0.83%, CAC +0.41%, Nikkei +0.11%, Shanghai +0.00%
Gold prices are off trading down 1.5% to $1,466 an ounce. WTI Crude Oil prices have bounced, up 2.4% at $57.69 a barrel.