FX News

Monday 31/05
All Day, GBP, Bank Holiday

Tuesday 01/06
All Day, USD, Bank Holiday
4:30PM, AUD, RBA Rate Statement
All Day, All, OPEC-JMMC Meetings

Wednesday 02/06
2:00AM, USD, ISM Manufacturing PMI
Forecast 61.2
Previous 60.7
3:00AM, GBP, BOE Gov Bailey Speaks
1:30PM, AUD, GDP q/q
Forecast 1.10%
Previous 3.10%
All Day, EUR, Italian Bank Holiday

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Key Points:

• Worldwide coronavirus cases surpass 169.610 million with over 3.524 million official deaths.

• No change to the RBNZ review Wednesday maintaining their asset buying program of 100B, the RBNZ saying they look to hike rates in the third quarter of 2022.  
• The New Zealand Dollar was the weakest currency into Wednesday trading turning this into the best performing currency post the RBNZ statement.
• Iron ore prices came off recent highs as China ramps up their crack down on the commodity. On the Dalian Commodity Exchange (Chinese futures exchange) price dropped 9% last week. The Australian Dollar has struggled off the back of the move with “FE” down at 206.40 this morning.  
• The Japanese state of emergency has been extended beyond 31 May – surely this puts the Olympic Games at risk but we suspect due to political implications it won’t be cancelled no matter what. 

Market Overview

• Worldwide coronavirus cases surpass 167.979 million with over 3.486 million official deaths.
• We expect no change to the RBNZ review this week (Wednesday 2pm NZT) with consensus that the central bank will keep rates on hold. The focus on the statement could be interesting with consensus that the RBNZ may keep a dovish tone despite better than expected recent economic performance.
• NZ Retail Sales for the March quarter rose 2.5% post a 2.7% drop in the December quarter. 10 of the 16 regions showed higher sales values as the country slowly recovers from the pandemic.
• French and German banks were closed Monday in observance of Whit Monday creating thin action in European markets and currencies.
• The New Zealand Dollar has been the weakest currency of its 7 peers over the past week with the Canadian Dollar the strongest.
• The RBA lag behind New Zealand, Canada, the UK and the US when it comes to inflation. The RBA is solely focusing on getting inflation back to its target range of 2 -3% of which they forecast won’t happen before 2024 at the earliest. We see this as the fundamental and perhaps only reason why the NZD continues to outperform the Australian Dollar.
• Iron ore prices came off recent highs as China ramps up their crack down on the souring commodity. On the Dalian Commodity Exchange (Chinese futures exchange) price dropped 9% last week. The Australian Dollar is weaker off the back of the move.
• The Japanese state of emergency has been extended beyond 31 May – surely this puts the Olympic Games in jeopardy.
• More than 60 million people in the UK have had the coronavirus injection now with 22 million having both doses.

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Monday 24/05
10:45AM, NZD, Retail Sales q/q
Forecast: 2.50%
Previous: -1.80%
Actual: -2.60%
All Day, EUR, French Bank Holiday
All Day, EUR, German Bank Holiday

Tuesday 25/05
All Day, CAD, Bank Holiday
12:05pm, JPY, BOJ Guv Kuroda Speaks
2:30AM, GBP, Gov Bailey Speaks
8:00PM, EUR, German ifo Business Climate
Forecast 98.2
Previous 96.8 Read more

Key Points:

• Worldwide coronavirus cases surpass 165.553 million with over 3.430 million official deaths.

• UK Inflation printed as expected at 1.5%y/y, up from the prior 0.7%.
• US Federal Reserve Bank minutes suggest that some members believe the central bank should start talking about a plan to taper asset purchases. 
• NZ budget today at 2pm local time isn’t expected to have a big impact on the markets. 
• Australian employment data is set for release in the next hour with expectations of a gain of 17.5k and the unemployment rate to be unchanged at 5.6%.
• Crypto currencies remain volatile with Bitcoin falling over 70% in the last two weeks, then recovering 20% from overnight lows of 29,700 to 39,800.

Market Overview

• Worldwide coronavirus cases surpass 164.262 million with over 3.403 million official deaths.
• Chinese April’s Industrial Production is up 9.8% y/y and Retail Sales is up 17.7% y/y a slight miss on the 25.6% predicted but steel production remains extremely high.
• US Retail Sales was weaker in April coming in at 0.0% following a 9.8% rise in March. This was predicted after the March led stimulus surge.
• US Industrial Production and Manufacturing rose 0.7% for April versus the 0.9% consensus with the mining indexes increasing 0.7% and the utilities increasing by 2.6%
• ANZ predict the Reserve Bank of New Zealand will start hiking interest rates again in August 2022 and to 1.25% by the end of 2023. Read more

Tuesday 18/05
1:30PM, AUD, Monetary Policy Meeting Minutes

Wednesday 19/05
6PM, GBP, CPI y/y
Forecast 1.40%
Previous 0.70%

Thursday 20/05
12:30AM, CAD, CPI m/m
Forecast 0.20%
Previous 0.50%
2:30AM, USD, Crude Oil Inventories
Previous -0.4M
6AM, USD, FOMC Meeting Minutes
1:30PM, AUD, Employment Change
Forecast 20.3K
Previous 70.7K
1:30PM, AUD, Unemployment Rate
Forecast 5.60%
Previous 5.60%
2PM, NZD, Annual Budget Release Read more

New Zealand House prices remained buoyant in April with data showing the National medium at 810,000, slightly down from March’s 825,000. Auckland is still showing signs of cracking on with things rising to 1,125,000 from March’s 1,120,000 values. Nationally 26.8% higher at the same time last year. Sales in April compared to March are down 28% which is a true signal confirming the heat in the market is coming off. Recent government tax changes to investment properties hasn’t yet affected prices, we expect this to slowly impact values over the coming months as the overinflated market softens. Read more

Market Overview

• Worldwide coronavirus cases surpass 159.593 million with over 3.317 million official deaths
• Non-Farm Payroll missed its mark by some margin Friday after jobs in the workforce diminished in April. Payrolls were expected to rise by 990,000 people but instead the number was reported as only 266,000 indicating tough economic times. This could give the Federal Reserve further confirmation to continue with an accommodative stance. The problem being recent fiscal stimulus could be acting as a deterrent for people to seek work or could it actually be a sign of a slower than anticipated labour market. We won’t really know until a trend develops, figures for May should reflect this. Read more

Monday 10/05
1:30pm, AUD, Retail Sales m/m
Forecast 1.40%
Previous 1.40%

Tuesday 11/05
9:30pm, AUD, Annual Budget Release

Wednesday 12/05
6pm, GBP, Prelim GDP q/q
9pm, EUR, EU Economic Forecasts
Forecast -1.60%
Previous 1.30%

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