Currencies Range bound while Stocks Continue to Climb

As expected, yesterday we saw a relatively quiet start to the week as bank holidays effected liquidity and volatility, however things did start to pick up later in the day and we saw some movement within the recent ranges. We saw a surge higher in the yen crosses as the stock markets continued to see gains as expectations of a bumper earnings season in the US grew, with AudJpy and NzdJpy having particularly strong days.

Data out of the US in the form of the ISM Manufacturing PMI was weaker than expected which dampened the enthusiasm for the dollar slightly, although expectation is still optimistic in the medium term with the market confident that the tax reform bill will go through and a June rate hike is 70% priced in.

Looking ahead to today and Asia kicks off with the Caixin Manufacturing PMI data out of China followed by the RBA’s Cash Rate announcement at 2.30 pm, once again no change is expected, but look for volatility if we see any change in stance from the Rabbit in their statement.

Later in the day, we have a raft of European Manufacturing PMI data culminating in the UK’s number at 6.30 pm. It’s very quiet for data releases in the New York session today, although we do have the Global Dairy Trade Price Index released later in the night which can usually be relied on to give the Kiwi a quick move – the previous print for that was 3.1%.

The early tomorrow morning (well earlier than I get this report out anyway!) we have the employment data out of New Zealand, so could be a busy night for those with positions in the flightless bird!

Rakuten Securities Australia Review