- New Zealand’s Reserve Bank left the cash rate on hold at 1.75% this morning, citing concerns over low core inflation and recent GDP growth. Monetary policy will remain accommodative for a considerable period according to the statement. In his press conference an hour late he stated “We don’t hold the hold the view of inflation pressures ramping up quickly”
- NZD/USD sold of hard as the market expected an upbeat response from the Bank, however given its Dovish stance a 120-pip sell off saw the Kiwi trade 11 month lows of 0.68193.
- US Equities closed mixed Wednesday as investors digested President Donald Trump’s firing of FBI Director James Comey. S&P500 up 0.11%, DOW -0.16%.
- Overnight ECBs Draghi’s comments at the Dutch House of Representatives had little effect on the market.
- Weekly Crude Oil inventories dropped sharply overnight, experiencing the biggest drawdown since January this year, with a -5.2M actual Vs -1.8 expected. This saw oil rally 2.3% on the session. Oil currently trading 47.63 having been as low as 43.97 last Friday.
- North Korea concerns and profit taking in the USD/JPY yesterday is over, with the pair resuming its uptrend, trading above the 114 level once again overnight. Next resistance at 115.50 on the daily chart.
- Tight ~90pip range in the GBP/USD this week. As UK elections draw near (latest polls: Conservatives 46%, Labour 30%) and politics heats up, expect some dip buying opportunities to present – these should be well supported by short covering and May’s expected position as number one front runner. BOE tonight will provide further information on this approach.
- Gold finding some support at the 1,215/20 levels. 1,200 the next support from back in March – this level would represent a 55% reversal of the years’ gains. Value buyers expected to enter at this level.
Today’s Economic calendar (AEST)
- 7:00am RBNZ Rates
- 8:00am RBNZ Gov Wheeler Speaks
- 6:30pm UK Manufacturing Prod
- 9:00pm BOE Inflation Report & Policy/Rates decision
- 10:30pm US PPI and Unemployment Claims
