Financial Market Review for February 02 2018 Economic data through the Asian session this morning was limited to New Zealand’s December building consents and wholesale price inflation figures out of Australia. It was a bad start to the day for the Kiwi Dollar, with building consents sliding 9.6% in December, reversing most of November’s 10.8% rise, the decline attributed to a fall in new stand-alone houses consented The Kiwi Dollar moved from $0.73977 to $0.73962 upon release of the figures. For the Aussie Dollar, wholesale prices were on the rise in the 4th quarter, with the producer price index rising by 0.6%, quarter-on-quarter, coming in ahead of a forecasted and 3rd quarter 0.2% rise, with yearon-year wholesale inflation coming in at 1.7%. The pickup was attributed to an increase in the prices of domestically produced goods (+0.5%) and prices of imported products (+0.6%). The increase in the domestic component came from an increase in prices for heavy and civil engineering construction (+0.7%); Petroleum refining and petroleum fuel manufacturing (+12.8%) and building construction (+0.4%). Information provided by ABS. The Aussie Dollar moved from $0.80307 to $0.80338 upon release of the figures, with the pickup in prices supporting a more upbeat inflation outlook for the 1st quarter, though a narrowing in yield differentials eventually hit the Aussie Dollar, which was down 0.55% to $0.7995 at the time of writing. Things were a little worse for the Kiwi Dollar, following this morning’s disappointing stats, with the Kiwi Dollar down 0.46% to $0.7363. For the Yen, the BoJ had to intervene in the bond markets as yields continued to disrupt, with the Yen giving up gains from the start of the session. At the time of writing, the Yen was down 0.27% to ¥109.69 against the Dollar. In the equity markets, The Nikkei and CSI300 were down 0.7% and 0.15% respectively, while the Hang Seng had a choppy start to the session, the index flat at the time of writing, with strong support coming from the rebound in crude oil prices overnight and this morning. Bond yields were on the rise again, with 10-year U.S Treasuries hitting 2.79%, inching ever closer to 3% that many in the market have called dooms day for the equity markets. Economic data out of the Eurozone this morning is on the lighter side, limited to Spanish unemployment figures and prelim January inflation figures out of Italy. While, Spain’s unemployment figures are forecasted to be EUR negative, we won’t expect there to be too much impact, with the markets more focused on inflation and all too aware of the troubles in Spain at the end of the year, with the Catalonia Independence Referendum. For Italy’s inflation figures, the numbers would have to be quite far off forecasts for the EUR to make any major move as the markets look ahead to this afternoon’s stats out of the U.S.
Tel. (+357) 250-288-6163 general@vinsonfinancials.com www.vinsonfinancials.com