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HiFX Morning Update, June 15 2017
HiFX Morning Update, June 15 2017
The NZDUSD opens at
0.7247 (mid-rate) this morning.
The Kiwi is up against all of its trading partners except the AUD. The Kiwi briefly tested over 0.7300 this morning and has traded a 120 point range in the last 24 hours.
The NZ Current account deficit seasonally adjusted was $2.8 billion during the quarter was up $1.1 billion from December last year. “It was the biggest quarterly deficit since the global financial crisis hit world markets in 2008,” Stats NZ said
The Fed hiked Interest Rates 0.25% this morning at 6am NZT. The pertinent points of the FOMC statement at 6:30am NZT were:
U.S. Fed have hiked interest rates 0.25%
to 1.25% (RBNZ is at 1.75% and RBA is at 1.5%)
Rate hike
reflects Economic progress
Fed Fund rate remains somewhat
below neutral level
Economy should continue to warrant
hikes, and appears to have rebounded
The Fed expects
inflation to move up to 2%
Signs of an improving Labor
market
Job market should strengthen somewhat
further
Apparent one off events weigh on
inflation
Policy is not on a pre-set course
Balance
sheet not intended to be active policy tool
Trimming of
balance sheet should begin this year by USD 50bn per
month
Balance sheet trim will take “a few
years”
Expect moderate growth in the next few
years
Yellen: “I intend to serve out term as Fed
chair” – no conversations with Trump about
Future
Yellen declines comment on future role as Fed
Chair, but “intends to find appropriate
nominees”
Conditions in place for inflation to
rise
The U.S. Consumer Price Index for All Urban
Consumers (CPI-U) decreased 0.1% in May on a seasonally
adjusted basis, the U.S. Bureau of Labor Statistics reported
overnight. Over the last 12 months, the all items index rose
1.9%. A decrease in the energy index was the main
contributor to the monthly decrease in the all items
index.
U.S. retail sales recorded their biggest drop in more than a year in May amid declining purchases of motor vehicles and discretionary spending, which could temper expectations for a sharp acceleration in economic growth in the second quarter. The Commerce Department said overnight retail sales fell 0.3% last month after an unrevised 0.4% increase in April. May's decline was the largest since January 2016 and confounded economists' expectation for a 0.1% gain.
The number of persons employed increased by 0.4% seasonally adjusted in both the Euro Area (EA19) and in the EU28 in the first quarter of 2017 compared with the previous quarter. In the fourth quarter of 2016, employment increased also by 0.4% in both areas. Compared with the same quarter of the previous year, employment increased by 1.5% in the euro area and by 1.4% in the EU28 in the first quarter of 2017.
The UK unemployment rate was 4.6%, down from 5.0% a year earlier and the joint lowest since 1975. The UK employment rate (the proportion of people aged from 16 to 64 who were in work) was 74.8%, the joint highest since comparable records began in 1971.
Today we have NZD GDP at 10:45am, AUD Inflation Expectations at 1pm, and AUD Employment change, AUD Unemployment Rate and RBA bulletin at 1:30pm
Global equity markets are mainly lower - Dow +0.07%, S&P 500 -0.13%, FTSE -0.35%, DAX +0.32%, CAC -0.35%, Nikkei -0.08%, Shanghai -0.73%.
Gold prices were up $5 or 0.4% at $1,271 an ounce before the FOMC but are now down $5 or 0.4% from yesterday’s open to $1261. WTI Crude Oil prices have plunged 3.6% lower at $44.75 a barrel.
ends
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