The Yen is the best performing currency overnight as trade tensions rise on US-Europe trade tensions and as IMF downgrades growth forecasts in 2019.
International Monetary Fund Reduces Growth Forecasts for 2019
The NZD opens relatively flat today as risk appetite fades after the IMF cut its forecast for global growth this year to 3.3%, down from 3.6% in 2019. The IMF lowered its forecasts after a notable slowdown in the second half of last year after strong growth in 2017 and early 2018, largely driven by populism, a slowdown in the Euro zone and Brexit uncertainty.
Trump Tweets Will Now Put Tariffs on 11 billion of EU Products
US President Donald Trump said he proposes new tariffs on imports from the European Union in retaliation to the EU’s subsidies of Airbus. This dispute has been a longstanding dispute at the World Trade Organisation. The EU is preparing retaliatory tariffs against the US over subsidies to Boeing Co.
May Pleas for Delay on Brexit
Prime Minister Theresa May is meeting in Berlin and Paris to seek an extension on the 12th April deadline with German Chancellor Angela Merkel and French President Emmanuel Macron today. Whilst it is still unclear what the two power house leaders will agree to, expectations are for the EU to reject May’s request for a short extension, instead EU members will likely offer a longer extension of up to 1-year. A longer extension to the Brexit deadline should provide some relief for the GBP.
Markets Eye Upcoming Key Events
RBA Deputy Governor Debelle speaks on The State of the Economy this afternoon.
Key focus tonight is on US core CPI tonight, where the market are looking for a 0.2% monthly increase in March, the FOMC minutes tomorrow morning at 6am. ECB rate announcement tonight, along with the EU Summit which will also be held.
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