Markets Remain Subdued Ahead of FOMC Meeting and UK Elections

. 2 min read

The AUDUSD opens at 0.6812 (mid-rate) and the NZDUSD opens at 0.6545 (mid-rate) this morning.

Markets remain subdued with investors holding off adding to their positions ahead of tomorrow morning’s FOMC meeting and Thursday evening’s UK elections.

There has been little reaction to a report from the Wall Street Journal stating the US plans to delay imposing additional tariffs on Chinese goods. The report said officials on both sides are close to agreeing terms on phase one of a trade agreement, and that they do not expect the tariffs planned for December 15th to take effect.

UK polls continue to predict a Conservative Party victory and as a result the British pound continues to outperform despite data showing the UK economy grew at the slowest annual pace in close to seven years during October.

The AUD has slipped against all its major rivals after yesterday’s NAB business survey showed business conditions have stabilised at low levels. The data showed the mining sector has seen a significant pull-back on lower commodity prices while construction and manufacturing sectors remain weak. Direction for the AUD during our trading day will be dictated by this morning’s Westpac consumer sentiment data release.

Direction for the NZD will be dictated by the NZ Government’s half-year economic and fiscal update due for release at 1pm. The NZD has been on the front foot since Finance Minister Grant Robertson signalled the Government is about to announce a “significant” fiscal stimulus package, and this afternoon we will discover exactly what the package entails.

Global equity markets remain mixed - Dow -0.10%, S&P 500 +0.05%, FTSE -0.28%, DAX -0.27%, CAC +0.18%, Nikkei +0.33%, Shanghai +0.10%

Gold prices are little changed trading at $1,462 an ounce. WTI Crude Oil prices are holding steady at $59.04 a barrel.

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