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XE Morning Update - May 24, 2019

NZDUSD 0.6519 0.3%
NZDEUR 0.5832 0.2%
NZDGBP 0.5151 0.4%
NZDJPY 71.44 -0.3%
NZDAUD 0.9453 0.2%
NZDCAD 0.8785 0.7%
GBPNZD 1.9411 -0.4%

The NZD opens up at 0.6519

It’s a nice change for the NZD to open up. It’s actually quite interesting that it has bucked the risk off theme. Globally we had a slew of PMI data out last night. PMI stands for Purchasing Managers Index, which is a survey of 500 Purchasing managers and gets them to rate their levels of business conditions. It is seen as a leading indicator, as if companies are not buying as much, it will eventually flow through into the economy. France and Australia held up ok, but this was more than offset by poor figures out of Germany, Europe and the US. Global growth concerns which had slipped to the back of people’s minds, now went straight to the forefront.

As you would expect, most of the usual reactions happened. Oil was down heavily, off 5.6%, gold up, and the Yen was the best performer as a safe haven. What is interesting is that usually in this scenario both the NZD and AUD would also be sold off. Number of theories of why this is, but to us the move down is starting to feel a bit exhausted, with the downside, in the Kiwi at least, fairly covered by the October lows only 60 points down. The Kiwi has not had a proper pullback in over 2 months, and it is starting to feel like the path of least resistance is higher in the short term.

Out of the UK it is looking like only a matter of time before we get a formal resignation out of Teresa May. It is hard to imagine that will speed Brexit up.
Global equity markets are down across the board, - Dow -1.11%, S&P 500 -1.19%, FTSE -1.41%, DAX -1.78%, CAC -1.81%, Nikkei -0.00%, Shanghai -1.36%.

Gold prices are up, trading up 0.9% at $1,283 an ounce. WTI Crude Oil prices have run out of gas, down 5.6% trading at $57.89 a barrel.


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