Collinson FX: May 15 - Budget has Kiwis on edge

by Collinson FX 14 May 2018 17:25 PDT 13 May 2018

Oceanbridge NZL Sailing Regatta, Day 3, February 5, 2018, Murrays Bay SC © Richard Gladwell

Collinson FX: May 15 - Budget has Kiwis on edge

15 May: The US trade negotiations continue with China and are progressing well. Trump has conceded the massive Chinese Company, ZTE, should be re-enabled in a compromise. The trade policy has a direct link to the North Korean negotiations, with the summit scheduled for June 12th. The US and Israel have celebrated the opening of the US Embassy in Jerusalem. This is a pointed signal to the world and a major realignment for the Middle East.

The Dollar was steady, with the EUR trading 1.1940, while the Yen moves to 109.65. Markets await some important economic data releases from the European Union, with GDP growth numbers and Industrial Production. The important ZEW Economic Sentiment report is usually an accurate gauge of future activity.

The AUD lost ground, falling to 0.7520, while the NZD looks to test 0.6900. The RBA releases minutes today, which should confirm the Central Banks propensity for inaction over monetary policy. The KIWI remains extremely vulnerable, ahead of the Rainbow Coalitions first budget, while monetary policy remains extremely generous.

Paul Snow Hansen, Dan Willcox (NZL) - Oceanbridge NZL Sailing Regatta, Day 3, February 5, 2018, Murrays Bay SC - photo © Richard Gladwell

Collinson FX: May 14 - Jitters over Middle East The Iranian crises continues to expand, as Israel responds to Iranian missiles, with attacks on Iranian bases in Syria. The US withdrawal from the Iranian nuclear agreement appears to be the trigger and now threatens the Syrian civil war spreading across the Middle East, becoming a multi-denominational conflict. Oil prices have gained some momentum, with the threat of sanctions being reimposed on Iran, boosting energy companies and stock markets.

The Dollar has been steady, with the EUR trading 1.1940, while the GBP holds above 1.3500. The GBP is again at the lower end of its trading range, after weak economic data releases and a dovish Statment from the Bank of England. The commodity currencies have been hammered, with the NZD trading 0.6950, while the AUD holding above 0.7500. The NZD came under extreme pressure after a reality check from the new RBNZ Governor.

This coming week has important growth data from Germany and Japan, while US Retail Sales are always an important number, to measure the health of the all-important consumer. Geo-Political issues remain front and centre of the coming weeks trade.

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