HiFX Morning Update, March 8 2018
The NZDUSD opens at 0.7281 (mid-rate) this morning.
The Kiwi starts today lower against all its major trading partners except the CAD which is again testing significant resistance at 1.3000 versus the USD
The NZD drifted sideways during our trading day yesterday, but then rallied 70 points or almost 1% during the start of the US session. Major data releases overnight were the US Private Sector employment and US Trade Balance which were the catalysts for USD strength.
U.S. Private Sector Employment increased by 235,000 jobs from January to February according to the February ADP National Employment Report. The total again defied Wall Street expectations, as economists surveyed by Thomson Reuters were expecting payrolls to grow by 195,000. Growth actually decelerated slightly, as January posted an upwardly revised 244,000 from the initially reported 234,000.
The U.S. trade deficit increased to a more than nine-year high in January, with the shortfall with China widening sharply, suggesting that President Donald Trump’s “America First” trade policies are unlikely to have a material impact on the deficit. The Commerce Department reported the trade gap jumped 5.0% to $56.6 billion. That was the highest level since October 2008 and followed a slightly upwardly revised $53.9 billion shortfall in December. Economists polled by Reuters had forecast the trade gap widening to $55.1 billion in January from a previously reported $53.1 billion in the prior month.
Canada's merchandise trade deficit totalled $1.9 billion in January, narrowing from a $3.1 billion deficit in December. Following a record high in December, total imports were down 4.3% in January to $47.7 billion, with declines in all commodity sections. Industrial machinery, equipment and parts, consumer goods, as well as electronic and electrical equipment and parts were the main contributors to the decline in January
The Bank of Canada overnight maintained its target for the overnight rate at 1.25%. The Bank Rate is correspondingly 1.5% and the deposit rate is 1%. Global growth remains solid and broad-based. In the United States, new government spending and previously-announced tax cuts are anticipated to boost growth in 2018 and 2019.
Oil prices pared some of their losses overnight after the U.S. Energy Information Administration reported that domestic crude supplies rose by 2.4 million barrels for the week ended March 2. Analysts surveyed by S&P Global Platts had forecast a climb of 2.5 million barrels, while the American Petroleum Institute on Tuesday reported a rise of 5.7 million barrels, according to sources. West Texas Intermediate (WTI) was down 2.7% from this time yesterday
Global equity markets are mixed: Dow -1.38%, S&P 500 -0.87%, FTSE +0.16%, DAX +1.09%, CAC +0.34%, Nikkei -0.77%, Shanghai -0.55%.
Gold prices are down 0.5% or $7 currently trading at $1,326 an ounce. WTI Crude Oil prices plummeted 2.7% currently trading at $60.85 a barrel.