April 1, 2019 — 4 min read
The AUDUSD opens at 0.7112, and the NZDUSD opens at 0.6811 (mid-rate) this morning.
We expect this morning’s quarterly business confidence data release to show yet another fall as businesses digest the impact of a possible Capital Gains Tax. Direction for the NZDAUD cross rate will be dictated by this afternoon’s RBA monetary policy statement and whether or not the RBA follows the RBNZ”s lead and shifts from a neutral to and easing bias.
Global equity markets have reacted positively to China’s upbeat manufacturing data after yesterday’s private manufacturing PMI survey (the official government PMI was released on Sunday) exceeded expectations and expanded for the first time in four months. The Caixin/Markit index rose to 50.8 in March following on from February’s 49.9 reading and represents the strongest rate of expansion in eight months. Economists had forecast the rate to remain unchanged at 49.9.
With a delegation led by Chinese Vice Premier Liu heading to Washington later this week to continue trade talks markets were also buoyed by the news that China will continue to suspend additional tariffs on U.S. vehicles and auto parts after April 1 as a gesture of goodwill. There were more positives than negatives in this morning’s US data releases with better-than-expected manufacturing and construction data releases outweighing an unexpected pull back in February’s retail sales.
The Institute for Supply Management (ISM) reported its purchasing managers index rose to 55.3 in March, economists had forecast the index to remain unchanged from February’s 54.2 reading.
Construction spending during the month of February spiked by 1.0% surprising economists who had expected spending to dip by 0.2% following January’s 1.3% jump.US retail sales unexpectedly dipped by 0.2% in February following on from an upwardly revised 0.7% increase in January the fall would far greater if it weren’t for rebound in sales by motor vehicle and parts dealers which rose by 0.7%.
The GBP has rebounded off yesterday’s lows and is the strongest performing of the G10 currencies. The British Parliament will this morning vote on a variety of Brexit alternatives in an attempt to find one that they can agree on. Theresa May has still not given up on a possible fourth vote on her deal after narrowing her margin of defeat to 58 votes from 230 votes in January.
Global equity markets have started the week on the front foot, - Dow +1.0, S&P 500 +0.90, FTSE +0.52%, DAX +1.35%, CAC +1.03%, Nikkei +1.43%, Shanghai +2.58%. Gold prices are edging lower, down 0.2% trading at $1,288 an ounce. WTI Crude Oil prices have surged higher overnight, currently up 2.5% trading at $61.70 a barrel.
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