May 6, 2019 — 3 min read
The AUDUSD opened at 0.6997 (mid-rate), and the NZDUSD opened at 0.6605 (mid-rate) this morning.
This afternoon the RBA, in what is too close to call will decide whether they reduce the OCR by 25bps or continue to remain on hold as they have done for the past 2-years. A lack of inflation and a deterioration of house prices in both Melbourne and Sydney remain major concerns for the RBA while the fact that a strong labour market has at this point failed to boost wage price inflation is also a worry. The market is evenly split between the RBA remaining on hold and cutting the OCR by 25bps with many investors of the opinion the RBNZ will follow the RBA’s lead when deciding whether or not they cut the OCR at this point in time.
An escalation in trade tensions, brought about by Trump’s tariff threat has put a dent into risk appetite with equity markets and risk-linked currencies underperforming.
Trump’s tweets raised concerns about whether this week’s scheduled trade talks would go ahead with the Wall Street Journal reporting that China was considering pulling out of the talks, however markets have retraced almost 50% of their fall after a spokesman for China's Ministry of Foreign Affairs said the Chinese delegation is "preparing to go to the U.S. for the negotiations."
Global equity markets are on the back foot, - Dow -0.68%, S&P 500 -0.76%, FTSE Closed, DAX -1.01%, CAC -1.18%, Nikkei Closed, Shanghai -5.58%.
Gold prices are little changed, trading at $1,281 an ounce. WTI Crude Oil prices are pushing higher, up 0.8% Trading at $62.53 a barrel.
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