Direct FX

This Weeks Key Points

Key Points:

Worldwide coronavirus cases surpass 246.229 million with over 4.995 million official
deaths.
New Zealand has 891 active cases of coronavirus with 97 new cases yesterday with the first case in over 1 year recorded in the South Island. Meanwhile, the Australian State of New South Wales reported 268 new cases and 2 deaths yesterday with Victoria reporting 1656 new cases with 10 deaths
RBNZ’s Governor Orr said monetary policy easing has done as much as it can amid a very different inflation and interest rate environment
Japan’s Inflation for September comes in at 0.1% vs 0.5% expected with unemployment remaining at 2.8%
A new Delta variant has experts worried in the UK with the new variant possibly more transmissible, it accounts for over 10% of all covid cases at a time when new cases are rising rapidly, the only positive news is that it seems to be less fatal than regular delta
Chinese company Evergrande has made another interest debt payment of 45.2M avoiding default
President Biden is said to announce steps to relieve currency stockpiles of goods caught in supply chain issues to ease inflationary pressures

FX Update for 2021-10-26: Risk Currencies on the Move

Market Overview

Key Points:
• Worldwide coronavirus cases surpass 244.753 million with over 4.968 million official deaths.
• New Zealand has 1256 active cases of coronavirus with 109 new cases yesterday. Meanwhile, the Australian State of New South Wales reported 294 new cases and 4 deaths yesterday with Victoria reporting 1461 new cases with 7 deaths
• German economic growth is predicted to slow significantly in the fourth quarter
• Ex-Fed chairman Alan Greenspan has waded in on the US inflation “transitory” debate and views a real threat of inflation remaining above 2% long-term
• A new Delta variant has experts worried in the UK with the new variant possibly more transmissible, it accounts for over 6% of all covid cases at a time when new cases are rising rapidly, the only positive news is that it seems to be less fatal than regular delta
• President Biden is to lift travel bans from November 8th
• Chinese firm Evergrande has made its interest payment obligations by paying more than 83.5M Friday but say they cannot guarantee future payments will be made
• UK Chancellor Sunak is set to raise the minimum wage from 8.91 to 9.45 Pounds Read more

FX News

FX Update for 2021-10-19: NZ CPI Release, A Concern

Key Points:

• Worldwide coronavirus cases surpass 241.814 million with over 4.919 million official
deaths.
• New Zealand has 652 active cases of coronavirus with 65 new cases yesterday. Meanwhile, the Australian State of New South Wales reported 273 new cases and 4 deaths yesterday with Victoria reporting 1749 new cases with 11 deaths
• Nasdaq moves to a new high of 15021 based on new Apple product launches
• Chinese CPI y/y third quarter comes in at 4.9% from 5.0% forecast
• US Treasury Secretary Yellen is to extend the incredible US debt management through to December after a small increase in the borrowing cap was announced last week
• Crude Oil continues to climb to 82.40 per barrel this morning as demand and shortages continue which could stoke inflationary pressures Read more

Key Points for 2021-10-15

  • Worldwide coronavirus cases surpass 240.247 million with over 4.894 million official deaths.
  • New Zealand has 617 active cases of coronavirus with 72 new cases yesterday. Meanwhile, the Australian State of New South Wales reported 406 new cases and 6 deaths yesterday with Victoria reporting 2297 new cases with 11 deaths
  • Fed’s Harker is not expecting any rate hikes until late 2022 early 2023
  • The New Zealand Dollar (NZD) is the strongest of the main currencies moving up 1.1%  
  • US Inflation y/y rises to 5.4% from 5.3% and appears NOT transitory
  • Crude Oil continues to climb to 81.40 per barrel this morning as demand and shortages continue which could stoke inflationary pressures
  • ECB’s lagarde says upswing in the Eurozone inflation is driven by temporary elements
  • The Peoples Bank of China Governor Yi Gang says Central Bank policy will be “prudent, flexible, targeted, reasonable and appropriate” as their inflation grows to 10.7% y/y the highest level in 25 years
NZD Holds Gains

FX update 2021-10-12: Covid Uncertainty Weighs Down Kiwi

Market Overview

Key Points:

• Worldwide coronavirus cases surpass 236.079 million with over 4.821 million official deaths.
• New Zealand has 342 active cases of coronavirus with 35 new cases yesterday. Meanwhile, the Australian State of New South Wales reported 496 new cases and 8 deaths yesterday with Victoria reporting 1466 new cases with 8 deaths
• US Non-Farm Payroll reports for September came in at 194,000 compared to 500,000 consensus
• Comments from ex-Prime Minister Tony Abbot on Taiwan disappoint the Chinese Foreign Ministry
• The NZ Truckometer – a GDP indicator, surged in September representing increased traffic volume and improving recent supply chain bottlenecks
• Crude Oil breaks into the 80’s as demand and shortages continue
• Offshore Bond holders of Evergrande have not received interest payments and may not meet the Monday (US time) deadline sparking risk off market trading conditions Read more

Economic Releases: 2021-10-11

Tuesday 12/10
All Day, CAD, Bank Holiday
All Day, USD, Bank Holiday

Thursday 14/10
1:30am, USD, CPI m/m
Forecast 0.30%
Previous 0.30%
1:30am, USD, Core CPI m/m
Forecast 0.20%
Previous 0.10%
7am, USD, FOMC Meeting Minutes
1:30pm, AUD, Employment Change
Forecast -135.0K
Previous -146.3K
1:30pm, AUD, Unemployment Rate
Forecast 4.80%
Previous 4.50% Read more

Key Points for 2021-10-08

Key Points:

  • Worldwide coronavirus cases surpass 236.079 million with over 4.821 million official deaths.
  • New Zealand has 376 active cases of coronavirus with 31 new cases yesterday. Meanwhile, the Australian State of New South Wales reported 594 new cases and 10 deaths yesterday with Victoria reporting 1838 new cases with 5 deaths
  • The RBNZ hikes its cash rate to 0.50% from 0.25%
  • Japanese premier calls for capital gains tax to rise from 20% to 25% 
  • Goldman Sachs predicts 600k headline for NFP result, much higher than forecast  
  • Crude Oil settles at 78.30 per barrel
  • Evergrande may continue to affect market sentiment as the “real” off balance sheet debt of the Chinese company is exposed.
  • Fed’s Mester sees US inflation driven by supply and demand factors due to coronavirus which may not see inflation rising further

RBA & RBNZ In The Spotlight: 2021-10-05

Market Overview

Key Points:
• Worldwide coronavirus cases surpass 236.079 million with over 4.821 million official deaths.
• New Zealand has 287 active cases of coronavirus with 29 new cases yesterday. Meanwhile, the Australian State of New South Wales reported 623 new cases and 6 deaths yesterday with Victoria reporting 1377 new cases with 4 deaths
• Hikes are on the way for the RBNZ starting tomorrow but analysts remain cautious
• WTI Crude up over 77.60 a barrel
• Chinese electricity outages causes mass supply chain issues, coal reserves have become dangerously low
• Evergrande sank the Hang Seng Index by over 2.0% overnight as repayment worries continue
• Core US inflation is not predicted to drop to their target 2.0% over the following couple of years with 2.8% forecast in 2022 with rises in export prices forecast Read more