Market Overview:
Currency markets were all broadly weaker through the later stages of the week once risk markets were put on notice. The Federal Reserve held their benchmark rate unchanged at 2.00%. September 27 is the next Fed meeting which markets are expecting a hike to 2.25% with a strong possibility later in the year for another if economic data continues to print well. The Non-Farm Payroll figure came in light at 157K which surprised markets after 191K was predicted. The number for July is weaker but upward revisions to May and June totalling 59K jobs show overall its close to market predictions. The employment rate moved lower to 3.9% from 4% with wages rising 0.3% month on month inline with expectations. Trade tensions have surfaced once again with President Trump proposing a change from the 10% tariff on Chinese products to 25% on US 200B worth of Chinese products, this week this should continue to dominate markets. China have retaliated with a range of their own tariffs of 60B worth of US products with anywhere between 5% and 25% levy. The RBA and RBNZ both have Cash rate and monetary statements this week with no real expected changes to policy. The RBA could be cautious with their lingo around inflation given the recent disappointing second quarter figures. The RBNZ more than likely not change their current track with growth weakening and inflation rising, we could see further downside in the kiwi after the announcement. Brexit is still a mess with recent talks stalling. Theresa May still fears that talking up the possibility of a Brexit deal could spark a mass exodus of businesses from Great Britain. A no deal situation still remains a high chance. Read more