HiFX Morning Update, April 27 2018
The NZDUSD opens at 0.7064 (mid-rate) this morning.
The NZDUSD has traded a 158 point or 2.2% range this week. The Kiwi has broken through this year's familiar 0.7200 to 0.7400 range, and the 200 moving day average of 0.7184, to test support at 0.7050.
Although we have entered oversold territory (Relative Strength Index at 29.9), don’t rule out a test of 0.7000 before a rally back to 0.7150 which would represent the 38.2 Fibonacci Retracement of a 0.7000 to 0.7395 (April 13th high) range.
The European Central Bank (ECB) held interest rates steady overnight, as investors eagerly awaited any further guidance over the bank's monetary stimulus program. The interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.40% respectively.
The Governing Council expects the key ECB interest rates to remain at their present levels for an extended period of time, and well past the horizon of the net asset purchases. Regarding non-standard monetary policy measures, the ECB confirmed that the net asset purchases, at the current monthly pace of €30 billion, are intended to run until the end of September 2018, or beyond, if necessary.
In the week ending April 21, the advance figure for seasonally adjusted U.S. Initial Claims was 209,000, a decrease of 24,000 from the previous week's revised level. This is the lowest level for initial claims since December 6, 1969 when it was 202,000. The previous week's level was revised up by 1,000 from 232,000 to 233,000. The 4-week moving average was 229,250
U.S. Orders for Durable Goods (long-lasting or made to last at least 3 years) jumped 2.6% in March, riding a big increase in contracts for Boeing planes. Market consensus was for a 2.5% increase. Business investment fell for the third time in four months. U.S. Core Durable Goods Orders (Durable Goods minus transportation i.e. planes, buses and cars) were unchanged.
The U.S. Trade Deficit was $68.0 billion in March, down $7.8 billion from $75.9 billion in February. Exports of goods for March were $140.1 billion, $3.4 billion more than February exports. Imports of goods for March were $208.1 billion, $4.4 billion less than February imports.
U.S. Advance Wholesale Inventories Wholesale inventories for March, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $628.8 billion, up 0.5% (±0.2%) from February 2018, and were up 5.8% (±0.9%) from March 2017.
Global equity markets are higher except China: Dow +1.15%, S&P 500 +1.27%, FTSE +0.57%, DAX +0.63%, CAC +0.74%, Nikkei +0.47%, Shanghai -1.38%
Gold prices have fallen a further $5 or 0.4% to $1,317 an ounce. WTI Crude Oil prices have regained 0.5% currently trading at $68.23 a barrel.