XE Morning Update - October 11, 2019
The NZD opens at 0.6321
The big mover overnight has been the GBP, with the Pound up circa 1.5% across the board. There was a meeting between Boris Johnson and the Irish PM, which was “Positive and promising”. The market has really latched on to it and rallied. However as part of the statement, “Consent and customs are issues, issues that still need to be resolved.” To us, this does not really fundamentally change anything, as these issue have been the main thing stopping the UK from stumbling out of the EU Trading Bloc.
In breaking news, Britain is also proposing a pared down free trade agreement, in a hope to end the Brexit stalemate. This presumably would be more straightforward to get sign off on, and a wider deal could then be built around it. For those on the quiz choosing between a) Deal, b) No deal, c) Extension and d) Snap Election, the correct answer is obviously e) Who cares, we have a trade agreement. In all seriousness though it really highlights that a “No deal” if and when it eventuates is not going to be marketed as such, and will be sold as a win, which should pare some decline.
Against the rest of its peers, the Kiwi is basically treading water, still yet to break out of its recent ranges. Business Manufacturing data out at 10:30 am NZT will give it some short term direction, but not enough to change the long term outlook.
Global equity markets were higher on the day - Dow +0.42%, S&P 500 +0.48%, FTSE +0.28%, DAX +0.58%, CAC +1.27%, Nikkei +0.45%, Shanghai +0.78%.
Gold prices dropped -0.4% to USD$1,501 an ounce. WTI Crude Oil prices are up 1.9% to US$53.55 per barrel.