May 26, 2019 — 3 min read
The AUD opened at 0.6933, and the NZD opened at 0.6556.
The Aussie and Kiwi dollars extend their good run of late, taking us to a 10-day high. Wednesday is shaping up as a big day for the NZD, with the stability report followed by RBNZ Gov Orr speaking, rounded off with a side of Business Confidence. For the AUD, Thursday will be a big day, with Building approvals, Private Capital Expenditure and the Annual Budget release.
Out of the States, Core Durable Goods missed expectations by 0.1%. While this does not sound too large on the face of it, a lot of economists used it as a catalyst to adjust their GDP forecasts. JP Morgan was possibly the most extreme, now seeing Q2 GDP at 1% in the states, down from 2.5%. Probably more of a lesson in taking forecasts with a grain of salt, but still this has flowed into USD weakness. Given it is a US Public holiday today though, consolidation across the board will not be a surprise.
One thing that may change this however is news of Teresa May announcing she will resign on June the 7th. She will then become interim Prime minister until a new leader is elected. While not entirely unexpected, it does add another complication to Brexit.
Boris Johnson is shaping up as the favourite to replace her, and he has already stated that “The way to get a good deal is prepare for a no-deal scenario”. Beyond rhetoric, one really wonders what else Boris can do differently if the EU refuse to renegotiate May’s deal. In this, a new election is probably the most likely outcome, and Boris’s promise that “We will leave the EU on Oct 31, deal or no deal”, already sounds like the usual hot air.
Global equity markets are down across the board, - Dow 0.37%, S&P 500 +0.14%, FTSE +0.65%, DAX +0.49%, CAC +0.67%, Nikkei -0.16%, Shanghai 0.02%.
Gold prices are flat at $1,284 an ounce. WTI Crude Oil prices are also net relatively unchanged at trading at $57.94 a barrel.
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