Daily Alert: Thursday 10th November 2016

Mark NugentDaily Alert, Nov 2016

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Forex Analysis for Thursday 10th November 2016
Economic Calendar

In yesterday morning’s post-US election fuss I neglected to mention that on Tuesday we had UK Manufacturing Production m/m beating target (0.6% vs 0.5%).

Yesterday (Wednesday ) saw New Zealand Official Cash Rate cut by 25bps to 1.75% as expected. Some strength was observed after the accompanying statement proclaimed house price inflation remains excessive – which could cause the RBNZ to delay any more easing. This move was later pared however, and Deputy Governor McDermott struck a decidedly more dovish tone later in Asia-Pac hours. The RBNZ are positive on annual inflation which is expected to rise from the December quarter and went on to state that they expect growth to be strong enough to have inflation settle around the middle of the target range. RBNZ Governor Wheeler stated that he considered the cash rate decision in light of the US election result and stated that at this stage he doesn’t think they will need another cut. RBNZ Deputy Governor McDermott said they can cut rates more if needed and risks on rates still are to the downside, adding that that the NZD is too high and they look at intervention at each meeting (ZeroHedge).

Market Reaction

Remarkably most major and all western equity indices closed yesterday up on the day despite large gaps down on open. Oil continued to grind up and through the 50MA. The EUR saw early strength later turned into a drop on the day as sentiment on Trump improved. The JPY fulfilled its role as safe haven until eventually closing almost at its opening price. The GBP strengthened as Trump sis seen to be good for a quick(er) UK/US trade deal. All the commodity currencies showed the same behaviour – initial large drops mostly pared by the close.

Media

A lot of Trump fallout.

Dimon says we must heed heed voices of economic frustration

Today

Today we have US unemployment claims.

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