The Kiwi Dollar opens slightly lower this morning as markets were generally subdued ahead of big announcements due later in the week. Key events over the next few days include the UK election, US Fed and ECB rate decisions, and the scheduled roll out of fresh Chinese import tariffs on December 15th.
Trade War Uncertainty
The December 15th tariff date remains in focus with mixed reports surfacing on what to expect. There is growing expectation that the next round of tariffs will be postponed allowing the continuation of talks on the unfinished items in the proposed “phase 1” accord. However the White House is keeping markets guessing with economic advisor Kudlow saying no definitive decision has been made and he cannot confirm any delay to the December 15th tariffs.
Mixed Data Out Of Europe
The Euro is trading higher this morning after a better than expected Economic Sentiment Survey in Germany. The surprise result can be credited with the recent rise in export numbers, giving a glimmer of hope that Germany’s economy can improve in 2020. Meanwhile UK GDP growth was virtually non-existent in Q3 as the Brexit saga continues to constrain the British economy. Despite the troubling data, the Pound continues its impressive run higher ahead of Thursday’s UK elections. Markets expect a Conservative majority and hope this will finally bring some certainty to the UK economy that is on course for just 1% growth in 2019.
The Day Ahead
On the local front today we have the NZ government’s half year economic and fiscal update at 1pm this afternoon, with markets expecting to see detail on the significant fiscal stimulus Finance Minister Grant Robertson has been referring to. Tonight sees the release of US inflation data for November, ahead of tomorrow mornings US FOMC rate decision, with markets expecting no change.
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