FX News

Key Points:

• Worldwide coronavirus cases surpass 215.356 million with over 4.485 million official deaths.

• New Zealand has 277 community cases of coronavirus with 68 new cases announced yesterday. Meanwhile the Australian State of New South Wales had 1029 new cases yesterday with Victoria 80.
• The death toll is mounting in Kabul following a bombing early this morning, numbers now show 13 US military personnel confirmed dead. 
• New Zealand Consumer Confidence drops to 109.6 in August following July’s 113.1 clearly a sign of existing level 4 lockdowns.
• Federal Reserve’s Kaplan doesn’t see a shift sooner from 2022 rate hikes. 

Key Points:

• Worldwide coronavirus cases surpass 213.211 million with over 4.452 million official
deaths.
• Australia weekly consumer sentiment survey: 101 – previous week 101.
• New Zealand Finance minister Robinson reports NZ has a strong fiscal position to handle lockdowns.
• New Zealand has 107 community cases of coronavirus with 35 new cases announced yesterday. Meanwhile the Australian State of New South Wales had 818 new cases yesterday with Victoria 50.
• Australian GDP will most likely fall 2.0% in the third quarter, then expand by 2.0% in the fourth quarter as restrictions are gradually eased.
• Gains in US Stocks/Equities overnight with the Nasdaq closing up 1.55% after word that the Pfizer Vaccine has been formally approved by the FDA Read more

Tuesday 24/08
1:45am, USD, Flash Manufacturing PMI
Forecast 62.4
Previous 63.4
1:45am, USD, Flash Services PMI
Forecast 59.1
Previous 59.9

Thursday 26/08
12:30am, USD, Core Durable Goods Orders m/m
Forecast 0.40%
Previous 0.50% Read more

Key Points:

• Worldwide coronavirus cases surpass 210.766 million with over 4.415 million official deaths.

• Lawmakers in the US have requested President Biden delay the 31st August withdrawal of troops out of Afghanistan saying they would stay in the country “to get all American citizens out”.   
• The New Zealand Dollar and the Australian Dollar have been by far the weakest currencies this week dropping over 1.0% against rivals.
• New Zealand has 22 community cases of coronavirus with 11 new cases announced yesterday. Meanwhile the Australian State of New South Wales had 685 new cases yesterday with Victoria 55.
• The US Dollar moves higher while equity markets Friday turn lower.
• The depreciation of Crude Oil continues with the commodity falling to 64.00 from its early July high of 75.87.

Market Overview

• Worldwide coronavirus cases surpass 208.458 million with over 4.381 million official
deaths.
• Thousands of US Troops will stage a mass exodus of Afghanistan over the coming days with US president Biden vowing ongoing support to the Afghan people outside of the country.
• The New Zealand Dollar (NZD) holds ground as markets wait for RBNZ rate decision Wednesday
• The State of New South Wales has recorded 452 new coronavirus cases and 1 death in the past 24 hours.

Major Announcements last week:

• NZ Inflation Expectations comes in at 2.27% over the next two years
• US Producer Price Index for July shows good demand at 1.0%
• US Core CPI for July prints at 0.5% down from 0.9% with y/y inflation remaining at 5.4%

Tuesday 17/08
1:30pm, AUD, Monetary Policy Meeting Minutes

Wednesday 18/08
12:30am, USD, Core Retail Sales m/m
Forecast 0.20%
Previous 1.30%
12:30am, USD, Retail Sales m/m
Forecast -0.20%
Previous 0.60%
1:15am, USD, Industrial Production m/m
Forecast 0.50%
Previous 0.40%
5:30am, USD, Fed Chair Powell Speaks
2pm, NZD, NZD, Official Cash Rate
Forecast 0.50%
Previous 0.25%
2pm, NZD, RBNZ Monetary Policy Statement
2pm, NZD, RBNZ Rate Statement
3pm, NZD, RBNZ Press Conference
6pm, GBP, CPI y/y
Forecast 2.30%
Previous 2.50% Read more

FX Update: 

Medium House Prices in New Zealand increased from 815,000 to 826,000 or 1.3% from June to July and a whopping 25.2% from y/y from 659,500 showing no signs of easing just yet. The strength in the market is reflected by the REINZ House Price Index which reached a new high of 3,937 for July. Values should hold across the country for a few months yet especially if we consider the seasonally adjusted figures paint an incredible picture mid-winter. With the RBNZ predicted to start hiking interest rates next week from the current 0.25%, we expect easing in the property market to start taking effect towards mid next year when values could start to slide.  Read more

Market Overview

• Worldwide coronavirus cases surpass 204.096 million with over 4.315 million official
deaths.
• New Zealand Medal Table at the close of the Tokyo Olympic Games: Gold 7, Silver 6, Bronze 7.
• The Bank of England left interest rates and QE level unchanged at their regular meeting with expectations the economy will return to the pre-covid 2019 economic levels by the end of the year.
• Gold dropped in value in early Monday trading from 1810 per ounce to 1683 after a large market order to sell 4B in stock.
• The State of New South Wales has recorded 356 new coronavirus cases in the past 24 hours.

Major Announcements last week:

• The RBA maintained their Cash Rate at 0.10% as the central bank kept “tapering” on the table
• New Zealand Unemployment Rate plummets to 4.0% from 4.7% in July
• The Bank of England maintainted their policy stance to meet inflation target of 2.0%
• US Non Farm Payrol (NFP) rose by 943,000 in July from 850,000 in June
• US Unemployment Rate drops to 5.4% from 5.9%

Monday 09/08
All Day, JPY, Bank Holiday

Tuesday 10/08
4am, USD, FOMC Member Barkin Speaks
1:30pm, AUD, NAB Business Confidence
Previous 11
9pm, EUR, ZEW Economic Sentiment
Forecast: 55.3
Previous: 61.2
9pm, EUR, German ZEW Economic Sentiment
Forecast: 54.9
Previous: 63.3

Wednesday 11/08
12:30pm, AUD, Westpac Consumer Sentiment
Previous 1.50% Read more

The Reserve Bank of Australia (RBA) left interest rates and policy settings unchanged after Tuesday’s meeting, which lent some support to the Australian dollar. The RBA continues to forecast a September start to tapering asset purchases (quantitative easing) and this was a surprise to some in the market who had expected the recent Covid lockdowns would see the bank delay tapering. It seems the central bank isn’t too concerned about the economic impact of the current lockdowns, at least at this stage. But with cases still growing sharply the likelihood of the current lockdowns dragging out much longer than expected is rapidly growing. Read more