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Markets Await FOMC

Published October 30, 2019

The Kiwi Dollar opens slightly firmer as markets largely consolidated ahead of tomorrow’s FOMC meeting and interest rate decision. The NZD did find some support yesterday following a speech from RBNZ Assistant Governor Christian Hawkesby who reiterated recent messages from the Bank that the August 0.50% cut in rates was a front loading ‘tactical decision’. Meanwhile, the USD was a touch lower as U.S Consumer Confidence data released overnight showed the index fall to 125.9 from 126.3 in September, and was worse than market expectations of a 128.0 reading. The focus of today’s local session will be the release on Australian inflation data this afternoon with markets expecting Q3 CPI to be a touch higher at 1.7% vs 1.6% from Q2.

Market Awaits Fed Decision

Currency movements have been largely capped this week as markets await tonight’s big announcements out of the U.S. Q3 GDP is due at 1.30am followed later by the FOMC meeting at 7am. Markets are largely expecting the U.S Fed to cut interest rates by 0.25%. As always, any comments from Chairman Powell will be closely monitored for clues on what and when the next move might be.

Pound Steady as UK Election Looking Likely

The British Pound edged higher as reports out of the UK suggested PM Boris Johnson would likely be successful in getting his wish for a December general election. Opposition Labour Party leader Jeremy Corbin has said his party would support an election, with parliament expected to vote on this later this morning. The Pound initially made ground on the news, before drifting back later in the day.

Trade War

Trade talk developments between the U.S and China continue to send mixed messages. Earlier in the week there was increased optimism with Presidents Trump and Xi scheduled to meet on November 17th with the aim of signing an interim trade deal. This optimism has been dampened overnight with reports that the “Phase-One” agreement might not be ready to be signed at next month’s meeting.

Rees Logan, Adam Nikitins and Stewart McCallum were appointed Joint and Several Voluntary Administrators of EncoreFX (NZ) Limited on 30 March 2020. Adam Nikitins and Stewart McCallum were appointed Joint and Several Voluntary Administrators of EncoreFX (Australia) Pty Ltd on 30 March 2020. Any queries regarding the Administrations should be directed to restructuring@nz.ey.com.