Market Overview:
A stronger fiscal position was the key point from the New Zealand Budget last week read by the NZ finance Minister Grant Robertson. Health was the main winner receiving 360M in additional funding over the next 4 years. 100M was put aside for District Health Boards to call on for extra infrastructure including rebuilding aged hospitals. The New Zealand Dollar was stable throughout the reading but drifted lower towards the end the week against the greenback back to 0.6900. The US Dollar (USD) has continued its run pushing higher against all its rivals as the strongest performer now over the last two to three weeks. The US Dollar index naturally has climbed higher to 93.83 inching closer to the 101.00 of April 2017. Risk markets should do well for at least the first half of this week as the trade talks between the world’s two biggest countries China and the US have been halted. US Treasury Secretary Steven Mnuchin said the US trade war with China is “on hold”. While they work on a larger picture trade deal they have agreed on a truce. This should fundamentally change the mood in the markets starting with the Asian equities as they are directly correlated. Steel and aluminum tariffs earlier this year developed into a complete shambles. The 10 year treasury yields are likely to fall from the seven year high of 3.13% achieved on Friday. Oil prices have been come down slightly from the high of around 72.40 (3.5 year high) last week, supported by falling Venezuelan production and solid growth demand and tensions coming from an unsettled Middle East. President Trump has ordered a fresh investigation as to any FBI/DOJ infiltration that was done during the presidential campaign for political purposes. This includes the Obama administration. This is a side-line to the ongoing investigation as to whether Russia interfered with the 2016 campaign and if the President was seen to unlawfully obstruct the enquiry. The Royal wedding between Prince Harry and Meghan Markle went off without a hitch, the reception was a “hell of a bash”, James Corden was MC with Elton John banging out the classics. All and all it seemed extremely well organised showcasing what the Poms are capable of. Read more