Analysts at Nomura offered a preview of the next key US data.

Key Quotes:

“Empire State survey: For the first round of manufacturing survey indicators in March, we forecast a reading of 13.0 for the Empire State survey (Consensus: 15.0), essentially unchanged from February’s reading of 13.1. While we remain optimistic about the manufacturing sector outlook, our neutral forecast for February largely reflects the downside risk of a deterioration in manufacturers’ sentiment in response to rising trade tension and its implications for input costs.”

“Philly Fed survey: Similar to the Empire State survey, we forecast 25.0 for the topline index of the Philly Fed survey in March (Consensus: 23.0), largely reflecting increased input cost angst, and close to February’s 25.8 print. Import prices: Import prices picked up notably in January with prices excluding petroleum products increasing 0.5% m-o-m, following continued weakness in the US dollar. Import price pressures in February could moderate somewhat relative to January.”

The post US data preview, what's next? – Nomura appeared first on CIX Markets.

The US Senate voted Wednesday to approve a bill that eases some of the regulations under the Dodd-Frank reform that was enacted following the 2008 financial crisis, as reported by Reuters.

Key highlights:

The US Senate voted 67-31 in approval of easing banking rules.
Congress is a step closer to completing the first rewrite of the Dodd-Frank reform law.
The draft now goes to the US House of Representatives.
The House Republicans say they want to add further provisions to ease financial regulations.
The bill eases tightened restrictions placed on small banks and community-level lenders, among other provisions that benefit all but the largest of the US banks.

The post US Senate approves bill in first step to rewriting Dodd-Frank – Reuters appeared first on CIX Markets.

Forex today was weighed down by pooer risk sentiment yet again with US stocks making the third day of declines on the back of escalated trade war tensions, the downgrading of GDP estimates and poor economic data. 

US retail sales fell 0.1% in February, a big miss vs the 0.3% gain while at the same time, the retail control group, a subset used for GDP calculations, rose a mediocre 0.1% (0.4% expected), after a flat Jan outcome, prompting widespread Q1 GDP downgrades. The Atlanta Fed GDP tracking model trimmed its Q1 projection to 1.9% annualised from 2.5%.

The US 10yr treasury yield dropped from 2.85% to 2.81% with the 2yr yields chopping between 2.24% and 2.29% for little net change at 2.26%. Fed fund futures continued to price three more hikes by end-2018 and another hike in 2019.

EUR/USD opened the European session 1.2405 and drifted lower to 1.2364 on a dovish ECB, opening slightly higher in the NY session on a less negative IP number than expectations before rallying to the 1.24 handle on the retails sales miss. However, risk-off took off in the session and the yen caught a bid. Stocks fell and EUR/JPY dragged the euro down to 1.2345 before a close of 1.2380 when risk sentiment reversed again. 

Cable was meeting supply in Asia around the 1.4000 stop territory level at the Feb 27th high and slid back to 1.3943 in London before bouncing back to 1.3991 in early NY trade. Supply was triggered once again to fresh lows in the 1.3920 picking up demand back to 1.3977 for a NY close of 1.3970 within said range of 1.3991-1.3925.

The cross was better offered again ending NY at 0.8855, within a range of 0.8880-0.8845, with the downside favoured in respect to the divergence between the BoE and ECB. The BoE will meet again on the 22nd of this month while at the same time, 22/23rd, Brexit will be under the spotlight at the EU summit. 

USD/JPY was changing hands sub the 107 handle again in the European session between 106.39-106.75 while in NY, risk sentiment was poor and the yen picked up a bid taking the dollar down to 106.06 after the retails sales data and lower GDP forecasts. 106.38 was the session high where the yen traded sideways into the close with the range stuck between the 21 and 10-D SMA.

As for the higher betas, with a bounce in the CRB and a better climate for commodities on Wednesday, the Kiwi stuck to a sideways range between 0.7320 and 0.7355, (dropping in early Asia on GDP miss), while the Aussie extended the upside to a high of 0.7917 and the highest level since 21 February. However, risk weighed in NY and the pair fell back to 0.7870/80 as US stocks fell.

Key notes from US session :

The GDPNow model estimate below now 2%

Key events ahead:

Analysts at Westpac noted the day’s key events as follows: “In Asia we see Feb trade data from Indonesia and India, plus Philippines Jan remittances data.

The US data calendar is crowded, though mostly with Feb sentiment surveys unlikely to have a major market impact. These include manufacturing (New York “Empire State” and Philadelphia Fed) and housing (NAHB Housing Market Index). The general mood should remain upbeat. Late in the NY session, US Treasury releases Jan data on capital flows. It will be interesting to see if the weakness in the US dollar in January coincided with further foreign selling of treasury debt.”


The post Forex today: dollar in a chop, data miss, lower stocks and risk sentiment, yen firm appeared first on CIX Markets.

Canadian Prime Minister Justin Trudeau commenting on NAFTA today during an interview on BloombergTV.

Key highlights:

There are always opportunities to improve NAFTA.
Canada is more than happy to accelerate NAFTA talks if needed.
Canada is not under the same time pressures as the US or Mexico.
Trudeau will stand up for Canada in NAFTA talks.
Very optimistic for a “win-win-win” NAFTA deal.
Confident a NAFTA agreement can be reached.
Canada is not a national security threat to the US.
Some US companies are exploiting protectionist measures from the US.
Canada is concerned about Chinese steel oversupply in the face of new tariffs.

The post Trudeau: NAFTA agreement can be reached – Bloomberg appeared first on CIX Markets.

Souring risk appetite is taking the wind out of the Aussie’s sails.
China data at 02:00 GMT could produce some knock-on volatility.

The AUD/USD pair is trading quietly after getting punished in the last half of Wednesday’s trading and is currently testing the waters around 0.7875 ahead what will likely be a quiet Thursday.

The Aussie lifted for the first half of Wednesday’s trading, trading up through Asia and the first half of the European session, but dragged lower to finish off the day. Now the AUD heads into Thursday’s early session on the backfoot after failing to hold the 0.7900 handle. Risk aversion is still the name of the game this week, with continuing drama from the White House as markets deal with the revolving door of Trump’s administration.

It’s a thin showing from the macro calendar today for the Aussie, but a few mid-tier releases may help shape sentiment expectations in the early session. The Australian Consumer Inflation Expectation indicator posts at 00:00 GMT, and the previous reading came in at 3.6%. With the Reserve Bank of Australia (RBA) heftily telegraphing their hesitant-yet-hopeful stance, the chances of a big beat for inflation expectations are slim. Shortly thereafter will be a bulletin from the RBA at 00:30, and the RBA’s quarterly bulletin will contain mostly information that has already been released, but will include an update to the RBA’s outlook considering the data that will be contained. After that, at 02:00 GMT, knock-on volatility could be expected from Chinese year-to-date Foreign Direct Investment, which previously came in at 0.3%. More eyes may be on foreign investment in China than usual given the rising tensions between China and the US following Trump’s recent announcement that the White House will be seeking an additional $60B in tariffs targeting China directly.

AUD/USD Technicals

As FXStreet’s own Valeria Bednarik noted, “The pair was unable to settle above the 0.7890 Fibonacci resistance, but heads into the Asian session with a positive bias, given that in the 4 hours chart, it steadily met buying interest around a still bullish 20 SMA, while technical indicators hold within positive territory, although without certain directional strength, as the pair remains within a familiar range.”

Support levels: 0.7820 0.7775 0.7740

Resistance levels: 0.7890 0.7920 0.7955

The post AUD/USD gains still limited as sentiment drives the pair appeared first on CIX Markets.

Analysts at ANZ noted the NZ GDP data that came in as 0.6% q/q vs. expected +0.8%. 

Key Quotes:

Economic growth was steady in Q4, with the economy expanding at a slightly slower-than-expected pace. Modest downward revisions also gave the figures a softer feel, although the details are perhaps not as disappointing as the headline figures suggest.
Ultimately though, the figures paint a picture of an economy growing close to trend, and it is a pace we more-or-less see continuing over the coming year or so. The economy is not firing on all cylinders, but neither is it rolling over to any worrying degree. At this point in the cycle, that is nothing to be scoffed at.
Overall, we see few implications for monetary policy. The OCR is on hold for some time yet.

Key Points

The economy expanded by 0.6% q/q in Q4, which was below consensus expectations (0.8%). It is a similar pace of growth to that recorded in Q3. But on the back of some modest downward revisions, annual growth was broadly steady at 2.9% y/y (where it has effectively held for the past 12 months).
Despite the softer-than-expected result, growth was actually reasonably broad-based in the quarter. In fact, 13 of the 16 production-based industries recorded stronger levels of activity, with agriculture, forestry and fishing (-3.2% q/q) proving to be the biggest drag, most likely on account of unseasonably dry and hot weather. Relative to our own expectations, this was the main source of surprise. Goods-producing industries eked out 0.4% q/q growth, led by a modest lift in construction activity and stronger value-added production from the utilities sector. Services sector activity, as expected, posted the strongest growth, rising 1.1% q/q, led by solid growth in retail and accommodation, professional and administrative services and transport.
Expenditure GDP rose a more modest 0.4% q/q. While that does sound weak, again the composition was arguably a little firmer. On the back of a solid lift in household consumption (1.2% q/q) and other fixed asset investment (3.7% q/q), final domestic demand posted a decent 1.2% lift. Courtesy of some large capital imports, net exports dragged on growth to the tune of 1.3%pts, while inventories made a large 1.3%pt contribution.
Across other elements of the figures, it was a mixed bag. Nominal growth was solid, at 1.4% q/q (6.1% y/y), and goes a long way to explain the recent strong run in monthly tax revenue outcomes. Real gross national disposable income also rose at a decent 1.4% q/q (3.0% y/y) pace. However, per capita growth has remained mediocre, at just 0.1% q/q (0.8% y/y).
Stepping back, while today’s figures are perhaps a touch disappointing, they still paint a picture of an economy recording a respectable pace of growth. Yes, the economy has cooled from the strong, above-trend rates experienced over 2016 (this is most noticeable in per capita terms). However, growth around trend (~3%) is certainly nothing to be scoffed at, especially at a time when the economy has been grappling with a softer housing market, credit headwinds, late-cycle capacity pressures and increased political uncertainty. It speaks to the economy’s flexibility and resilience.
And looking forward, it is a pace of growth we more-or-less expect to continue. Yes, there are headwinds. Firms are facing greater margin pressure, the low-hanging fruit growth wise have already been picked. We need solid rates of productivity growth to be maintained, given that recent strength in population and labour utilisation growth is unlikely to be maintained. There remain risks from the global backdrop, especially, most recently, on the trade front. And we expect household consumption growth to slow (even with still decent household income growth) as precautionary saving is rebuilt. But with fiscal stimulus around the corner, the terms of trade at historic highs and internal and external imbalances far less pronounced than they’d typically be at this point cycle, we don’t see the cycle tipping over in any meaningful way just yet

The post NZ GDP: the bottom line – ANZ appeared first on CIX Markets.

New Zealand GDP data come is lower than expected.
NZD is lower against the AUD, USD and GBP.

The AUD/NZD is trading at around 1.077 after the pair jumped on worse than expected New Zealand GDP data. 

The NZ GDP came in at 2.9% vs 3.1% y/y while the monthly data came in at 0.6% vs 0.7% expected. In a swift reaction, the AUD/NZD gained almost 40 pips in 5 minutes following the news reaching an intraday high at 1.0785. The NZD has also greatly depreciated against the US Dollar and the British Pound. 

Coming up next is the consumer inflation expectation in March at 00.00 GMT and the Royal Bank of Australia Bulletin at 00.30 GMT.  

AUD/NZD daily chart

Today’s move on the AUD/NZD is encouraging for bulls. However, they still need to break out of the range and the 1.0800 level. If they manage to do so, the next scaling point is seen at 1.0850 supply zone with the 200-period DMA. The market should be supported at 1.0700 lower part of the multi-day range and 1.0650 which is the cyclical low.

The post AUD/NZD en route to 1.0800 as New Zealand GDP disappoints appeared first on CIX Markets.

NZ GDP: q/q 0.6% vs exp. 0.8%, prev. 0.6%; y/y 2.9% vs exp. 3.1%, prev. 2.7%.
GDP miss takes the top off NZD/USD to cap off Wednesday’s trading.

The NZD/USD has bottomed out of Wednesday’s trading range on a miss for New Zealand GDP figures, currently testing just above the 0.7300 handle, and the pair heads into Thursday’s Asia session on the backfoot and at the mercy of teetering risk sentiment in the broader markets.

The Kiwi has been struggling to get some wheels under it as of late, and despite consistently pushing back away from the 200-day SMA remains unable to develop enough momentum to confidently continue the bull-run that kicked off last December. Economic growth continues to lag behind expectations for New Zealand, and any stretches upwards in the charts owe most of their livelihood to outright Dollar selling in broader markets rather than any intrinsic strength building up in the NZD. Political turmoil across the globe is taking the wind out of risk appetite’s sails, with Trump’s White House administration constantly expunging key members of the President’s team in favour of new faces, The Japanese government roiling amidst a document forging scandal involving the Finance Minister Taro Aso, and on-again, off-again struggles from an opaque path forward for Brexit.

New Zealand’s GDP figures for the final quarter of 2017 were a miss, though the numbers still managed to come out slightly better or at least on par with the previous figures, with year-on-year GDP coming in at 2.9%, below the expected 3.1% (likely due to flatlining in manufacturing), but still above the 2.7% posted for the previous year. The GDP release highlights the Kiwi’s middling problem: underlying fundamentals are building, but at a slower pace than acceptable, and the Reserve Bank of New Zealand (RBNZ) continues to struggle in a lopsided economic environment as expectations for rate increases from New Zealand’s central bank continue to get pushed back. No movement is expected from the RBNZ for the rest of 2018, and calls for a hike in early 2019 are beginning to look premature as well.

Little else of note remains on the macro calendar for New Zealand this week, and overall market sentiment will be the continued driver underpinning action in the NZD/USD.

NZD/USD Technicals

As FXStreet’s own Flavio Tosti noted, “If the resistance from 0.7340 is broken there is nothing much in the way and bulls should be able to bring the market to the 0.7400 psychological level. On the opposite side, if bears win the market will most likely push through the 0.7320 intraday support and reach the 0.7280 level, the 38.2% Fibonacci retracement, close to the 100-period SMA. If the bears have enough strength they can hope to get to the 0.7240 level,  the 23.6% Fibonacci retracement.”

The post NZD/USD falls back to 0.73 on GDP miss appeared first on CIX Markets.

The Gross Domestic Product Q4 data released by the Statistics New Zealand came in as 0.6% q/q vs. expected +0.8%. The RBNZ had been expecting a quarterly gain of 0.7%, after 0.6% in Q3, referencing their February Monetary Policy Statement.

0.6% q/q expected +0.8% q/q, prior +0.6%.
2.9% y/y expected +3.1% y/y, prior +2.7%.

Key notes:

NZD to remain underpinned – UOB
NZDUSD Forex Signal

About Gross Domestic Product Q4


The Gross Domestic Product released by the Statistics New Zealand is a measure of the total value of all goods and services produced by New Zealand. The GDP is considered as a broad measure of New Zealand economic activity and health. Generally speaking, a high reading is seen as positive (or bullish) for the NZD, while a falling trend is seen as negative (or bearish) for the NZD.


The post New Zealand Q4: miss of 0.2%, Kiwi lower appeared first on CIX Markets.