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HiFX morning Update, January 23 2019


NZDUSD 0.6726 0.0%
NZDEUR 0.5919 0.0%
NZDGBP 0.5188 -0.6%
NZDJPY 73.47 -0.4%
NZDAUD 0.9435 0.4%
NZDCAD 0.8975 0.3%
GBPNZD 1.9275 0.6%

The British pound is the standout performer overnight helped higher on stronger-than-expected economic data.

Early yesterday evening the UK the Office for National Statistics employment report for the month of December showed employment increased by 141k jobs to a record high of 32.54 million well ahead of the expected 87k jobs increase. UK employment now sits at 75.8% its highest level since records began in 1971. Unemployment in the three months to November fell to 4.0% down from 4.1% in the previous 3-months, market expectations were for unemployment to remain unchanged. Novembers average weekly earnings, including bonuses, rose by 3.4% on the year, the largest increase in a decade. The data suggests that if it weren’t for Brexit uncertainty the Bank of England would be responding to these inflationary pressures by hiking interest rates.

Global equity markets along with US treasury yields are in the red after the IMF downwardly revised its 2019 growth forecast from 3.7% to 3.5% siting a high level economic risks including “brexit” and the ongoing US China trade war as the main drivers for the downgrade. The DOW is currently down 1.5% while yield on the benchmark 10-year Treasury note fell is down 4 basis points to 2.755.

This morning the market expects NZ’s Q4 CPI to remain flat following on from Q3’s 0.9% increase which is expected to push the annual rate of price growth down from 1.9% to 1.8%. The sharp fall in energy prices during this quarter is the main catalyst for a softer result.

Global equity markets have turned negative, Dow -1.50%, S&P 500 -1.52%, FTSE -0.99%, DAX -0.41%, CAC -0.42%, Nikkei -0.47%, Shanghai -1.18%.

Gold prices are little changed trading at $1,282 an ounce. WTI Crude Oil prices are have fallen sharply overnight, down 3.0% trading at $52.59 a barrel.

ends

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