FX News

Market Overview

• Worldwide coronavirus cases surpass 177.020 million with over 3.827 million official deaths
• The IOC won’t be cancelling the Olympic Games to be held in Japan late July after calls to cancel it by top ranking Japanese officials.  Japan has sunk at least 35B into staging the games which will make it the most expensive ever. The IOC’s integrity is on the line.
• The Federal Reserve still believe that inflation rises are transitory after CPI y/y rose from 4.2% to 4.99% – we should get an update from the Federal Reserve this week on future forecasts
• UK prime minister Johnson extends UK coronavirus restrictions to the 19th July 2021 after a fresh flood of the new delta variant
• The Nasdaq and S&P indices close at record highs
• Crude Oil extends higher to 3 year highs at 71.22 per barrel
• NZ House Price rise 1.5% m/m in May making this 24.7% y/y

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Monday 14/06
All Day, AUD, Bank Holiday
All Day, CN, Bank Holiday

Wednesday 15/06
12:15am, GBP, BOE Gov Bailey Speaks
12:30am, USD, Core Retail Sales m/m
Forecast 0.40%
Previous -0.80%
12:30am, USD, PPI m/m
Forecast 0.50%
Previous 0.60%
12:30am, USD, Retail Sales m/m
Forecast -0.60%
Previous 0.00% Read more

Market Overview

• Worldwide coronavirus cases surpass 174.738 million with over 3.762 million official
deaths.
• Japan’s senior medical advisor has warned Japanese officials against staging the Olympic Games on the 23rd of July based on the strain it could put on healthcare workers.
• The Federal Reserve still believe that inflation rises are transitory/temporary and that price rises will return to normal ahead.
• NZ Business Survey for June confidence came in at -0.4% on 1.8% prior but businesses generally remain economic supportive.
• US President Biden meets with UK Prime Minister Johnson tomorrow to discuss the G7 global minimum tax rate.
• The heavy traffic ANZ “Truckometer” Index for May was down -4.8% against -1.2% m/m showing the NZ economy is under reasonable pressures facing supply issues and logistics. Read more

Tuesday 08/06
9PM, EUR, ZEW Economic Sentiment
Forecast 85.5
Previous 84
9PM, EUR, German ZEW Sentiment
Forecast 86
Previous 84.4

Wednesday 09/06
1PM, NZD, Prelim ANZ Business Confidence
Previous 1.8
1:30PM, CNY, CPI y/y
Forecast 1.60%
Previous 0.90%
4PM, AUD, RBA Assist Gov Kent Speaks Read more

Key Points:

• Worldwide coronavirus cases surpass 172.886 million with over 3.716 million official deaths.

• Japan’s senior medical advisor has warned Japanese officials against staging the Olympic Games on the 23rd of July based on the strain it could put on healthcare workers.
• Goldman Sachs are predicting 750,000 print for tonight’s NFP release much higher than the 645,000 analysts are forecasting. 
• President Biden’s administration is considering opening its proposal to raise corporate tax to 28% 
• New Melbourne community spread coronavirus infections are expected to draw out Thursday’s lockdown reopening which will have economic impacts as there is no current federal government wage support program.
• The Australian economy grew by 1.8% in the March quarter reflecting recent easing of coronavirus restrictions and a labour market recovery. 

Market Overview

• Worldwide coronavirus cases surpass 171.451 million with over 3.564 million official
deaths.
• Japan coronavirus numbers continue to rise with restriction measures to continue to within 5 weeks of the Olympic Games.
• Iron Ore prices have soured as China ease emission controls which will boost Australian exports.
• Malaysia will go into a nationwide lockdown on the 1st of June closing down most industries including car manufacturers Toyota and Honda until the 14th of June.
• No fireworks are predicted today in the RBA policy statement but risks are tilted to a “hawkish” shift.
• New Melbourne community spread coronavirus infections are expected to draw out Thursday’s lockdown reopening which will have economic impacts as there is no current federal government wage support program. Read more

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