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Risk-off Returns as US Companies Profits Down Amid Slowing Chinese Economy

Published January 29, 2019

The NZD opens lower overnight as markets head into a risk-off tone following US companies Caterpillar and Nvidia citing concerns on a slowing Chinese economy and the potential impact on US corporate earnings. US stocks fell sharply and this increased fears about global growth.

US oil prices tumbled more than 3% overnight after an increase in US crude drilling signals further growth in supply.

US Government re-opens for now

The partial government shutdown ended over the weekend with temporary funding that will re-open agencies until the beginning of February. President Trump specified that he is willing to close the government again through the use of emergency powers if lawmakers fail to provide funding for the border wall by the deadline. Markets reacted positively with the NZDUSD hitting a high of .6872 yesterday, but it has since fallen back overnight.

In other US news, US-China trade talks will resume later this week. Additionally, the US Federal Reserve announce their rate decision on Thursday morning at 8:00 AM.

UK Parliament to Vote on Brexit Plan

UK MPs are due to vote on a number of amendments to Theresa May’s Brexit plan tonight, with key focus on one amendment to take a no-deal scenario off the table. Another proposal includes delaying Brexit and going back to the EU to demand changes to the Northern Irish backstop. The EU has told PM Theresa May that Britain needs to decide what it really wants but the negotiated divorce deal will not be reopened.