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HiFX Morning Update, July 10 2017

The NZDUSD opens at 0.7275 (mid-rate) this morning.

The USD finished the week strongly boosted by a much better than expected employment report.

The US non-farm payroll employment increased by 222k jobs in June following an upwardly revised increase of 152k jobs in May. The increases were substantially larger than forecast, with economists predicting an increase of 179K jobs in June, while May had previously reported an increase of 138K jobs in May. Despite the job growth increase, the unemployment rate edged higher, up 0.1% to 4.4% in June.

Earlier in the evening the UK Office for National Statistics reported an unexpected fall in industrial production, with the report showing, industrial output fell 0.1% m/m in May. Economists had forecast an increase of 0.4%. UK house prices also declined for the first time since January with the Markit report showing house prices edged down 0.1% in June following a 0.3% increase in May.

The JPY weakened further on Friday after the BOJ announced plans to increase its bond-buying. The move is intended to stop the recent rise in Japanese bond yields. The BOJ has set a target of keeping the 10-year JGB yield at zero.

Despite a falling oil price the CAD strengthened on the back of another strong employment report fuelling expectation that the BOC will hike rates \at their July 12th meeting.. The report showed employment increased by 45.3k for June following a 54.5K increase in May and well ahead of the forecast 11.4K gain.

With very little in the way of domestic data releases this week investors are likely to focus on Fed Chair Yellen’s testimony to the US Congress and Senate and the BOC’s monetary policy report, both due for release in the early hours of Friday morning.

Global equity markets closed out the week mixed - Dow +0.44%, S&P 500 +0.64%, FTSE -0.51%, DAX +0.06%, CAC -0.14%, Nikkei -0.33%, Shanghai +0.17%.

Gold prices fell 1% on Friday closing out the week $1,212 an ounce .WTI Crude Oil plunged on Friday, losing 2.5% and closing out the week at $44.23 a barrel.


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