Investor Risk Appetite Boosted by Renewed US-China Trade Optimism

The AUDUSD opens at 0.6852 (mid-rate) and the NZDUSD opens at 0.6526 (mid-rate) this morning.

Renewed optimism surrounding a US-China trade deal, following a Bloomberg News report has boosted investor risk-appetite.

According to the report both parties are close to agreeing on the amount of tariffs that would be rolled back in a phase one trade deal. negotiators are hopeful of implementing this before December 15th when the US are set to raise tariffs again.

US equity markets have pushed higher on the trade news which is offsetting this morning’s disappointing US economic data.

This morning’s ADP private sector employment report for November came in much weaker than expected, with a employment increasing by 67k jobs well short of the forecast 140k jobs increase. Octobers' previously reported 125k jobs increase was downwardly revised to 121k.

The ISM service sector activity report was also underwhelming with the non-manufacturing index falling at a faster pace than expected. The index fell to 53.9 in November following a 54.7 reading and below the expected 54.5 dip.

The key driver for the AUD today will be this morning’s retail sales report  with current expectations of a 0.3% m/m increase.

For the NZD, the key driver will be this afternoon's bank capital review, with RBNZ Governor Orr due to speak at 1pm local time.

Global equity markets are mixed - Dow +0.72%, S&P 500 +0.69%, FTSE +0.42%, DAX +1.16%, CAC +1.27%, Nikkei -1.05%, Shanghai -0.23%

Gold prices are little changed trading at $1,474 an ounce. WTI Crude Oil prices have surged higher, up 4.2% trading at $58.41 a barrel.

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Australia Morning Update | New Zealand Morning Update