市場新聞與洞察

The Reserve Bank of New Zealand (RBNZ) will make its first interest rate decision for the year 2019. We will see the Press Conference, Rate and Monetary Policy Statement on Wednesday. Market participants are expecting the RBNZ to adopt the same dovishness seen lately by major central banks The Reserve Bank of Australia The Federal Reserve Bank The European Central Bank The Bank of England.

The global downside risks have increased, and major central banks are downgrading their growth forecasts. It is widely expected that the RBNZ will follow suit in the shift towards easing and echoed the RBA’s concerns. New Zealand’s economy has slowed in the second half of 2018.

Gross Domestic Product (GDP) grew by 1.0% in the June 2018 quarter compared to the September quarter whereby the economy increased by only 0.3%. June 2018 Quarter: GDP, Industry growth and contribution to growth. Source: Stats NZ September 2018 Quarter: GDP, Industry growth and contribution to growth.

Source: Stats NZ The Labour market reports received last week might add to a more cautious tone from the RBNZ. The Unemployment rate rose back to 4.3% in the December 2018 quarter, up from 4.0% (revised) in the previous quarter. The Housing sector is also experiencing volatility dragged by bank prudence, investor wariness, and affordability constraints, along with the foreign buyer ban, which prevents foreigners from buying homes.

Keeping these in mind, and in anticipation of the same dovish comments from the RBNZ, the markets are aggressively pricing in the chance of a rate cut later this year which is weighing heavily on the local currency. The price action of New Zealand dollar pairs will, therefore, depend on how dovish the RBNZ will be compared to the current expectations. It should be noted that odds of a rate cut were also on the table last year.

However, back in January, the released inflation data cast some doubts about a cut, and it will be interesting to see how the RBNZ plays out the growing global risks.

After a Liberal leadership crisis hit the Australian dollar last week, the victory of former Treasurer, Scott Morrison brought some relief to the markets given that he was the most market-friendly option. This week the Australian banks are in the limelight. The banking sector recently made headlines over the Royal Commission’s investigation but a month before the first findings of the royal commission are released, a surprise increase in the variable home loan rates by Westpac stole the show.

The reason behind the hike appears to be the “higher borrowing costs from international markets”. The impact on the financial markets was immediate: ASX200 touched another fresh 10-yr high boosted by the financial index which jumped by 1.5%. Source: GO Markets MT4 (Weekly Chart) The Australian Dollar dropped sharply and saw more than 70 pips movement after the announcement.

Source: GO Markets MT4 (Hourly Chart) Westpac's move is similar to the RBA tightening of the economy. The Reserve Bank was under pressure to hike interest rate, and such a move should have cheered up the Australian dollar. However, higher mortgage repayments and a stagnant economy were the reasons behind the reluctance of the RBA to increase the interest rate.

The bank independent pricing decisions will increase the mortgage burden on Australians who are already bearing higher living costs- rising energy prices and private health insurance costs. Subsequently, Consumer Confidence and household spending will likely take a hit and those concerns could put pressure on the RBA to take actions. A rate hike is unlikely, and the markets are either expecting the RBA to stay on hold for longer than expected or even reduce rate.

Loan funding pressures can change the dynamics of the current monetary policy as the probability of a rate hike in 2019 decreases while the possibility of a cut increases. The central bank would have to wait and analyse the impact of this sudden bank interest rate hike on the macroeconomic level. All eyes are on the next RBA meeting as the local currency could suffer a more profound decline on a deeper dovish RBA expectations.

Upcoming News » 6:30pm Construction PMI - GBP » No release time, GDT Price Index - NZD As expected the RBA cut interest rates by 25 basis points. The AUDUSD dropped on the news but has retraced most of its drop. The AUDUSD lost 54 pips to.7488, buyers have come back in taking it back above.7500.

The AUS200 lost ground after the disappointing building approvals and trade balance figures. It found some buying support post rates release but is currently still trading lower by 23 points. The USD and JPY have seen quiet trade so far today with small Asain session ranges.

Signs did come in we might be some JPY selling but currently, it’s very choppy with little direction. Tonight I’m looking for weaker opens in Europe with strong selling on the GER30 and UK100 overnight. The UK100 has broken out of a trend channel and is sitting around a support base.

Gold is showing active sellers at 1354 this could come in as short term resistance off 1355. Price is still in a short-term trend up but I would like to see 1354.20 closed above to show a continuation towards 1366 highs. AUDUSD – Considering the negative influences today the AUD has held up very well.

The rate cut took prices down to.7490, this area has shown support and indecision previously. We have seen this area reconfirm today. I’d be paying attention to this level for the near term.

Continued buying could set up a failed low if buying holds out tonight. US30 – Today’s price is sitting on a key short-term level. Overall we have a bearish channel.

The key level 18395 has seen 5 tests holding up so far. To the top, we have a lot of downward pressure. A break lower set’s in new prices not seen since mid-July.

A break above the channel sets up a continuation of the current trend which could offer a buy idea. If we see a break lower, I’d be looking for a test down to 18235. XAUUSD - Gold is showing a normal trend formation with the current retracement not overlapping its previous high. 1355 is showing short-term resistance.

Overall the picture still looks good on the Med term for continued higher prices. I would like to see any short term pull back to find support from 1333 to 1341. A break and close below 1333 could be indicating a lower high is coming in and confirming.

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Written by Joseph Jeffriess, GO Markets Market Strategist

On 23 rd June 2017, Saudi Arabia and its allies issued a list of demands giving Qatar 10 days to respond to their ultimatum. It has now been just over a month since seven countries announced that they will be cutting all diplomatic ties with the Gulf nation 5 th July saw the leaders of the four countries seeking to isolate the tiny Gulf nation met in Cairo, the capital of Egypt and advised they have received a response from Qatar and will be looking to respond to their response in a timely manner. Here is the full list of the demands put forward by Saudi Arabia and its allies – Limit diplomatic ties with Iran and close their diplomatic missions there Stop all ties with terrorist organisations Shut down the Al Jazeera and its affiliates Shut down news outlets funded by Qatar With immediate effect terminate all Turkish military presence in Qatar and end any joint military cooperation with Turkey inside Qatar Stop all means of funding for individuals, groups or organizations that have been classed as terrorists Hand over all ‘terrorist figures’ and wanted individuals from Saudi Arabia, the UAE and Bahrain to their countries of origin End interference in sovereign countries internal affairs and stop granting citizenship to wanted national from Saudi Arabia, the UAE, Egypt and Bahrain.

Revoke Qatari citizenship for existing nationals where such citizenship violates those countries’ laws Stop all contacts with the political opposition in Saudi Arabia, the UAE, Egypt and Bahrain. Hand over all files detailing Qatar's prior contacts with and support for those opposition groups Pay reparations and compensation for loss of life and other, financial losses caused by Qatar's policies in recent years. The sum will be determined in coordination with Qatar Align itself with the other Gulf and Arab countries militarily, politically, socially and economically, as well as on economic matters, in line with an agreement reached with Saudi Arabia in 2014 Agree to all the demands within 10 days of it being submitted to Qatar, or the list becomes invalid.

The document doesn't specify what the countries will do if Qatar refuses to comply Consent to monthly audits for the first year after agreeing to the demands, then once per quarter during the second year. For the following 10 years, Qatar would be monitored annually for compliance [caption id="attachment_57005" align="alignright" width="600"] USOUSD Source Go Markets MT4[/caption] This has had an overall effect on the market, we have seen the oil prices plummet in the recent weeks (red vertical line – the day other countries announced cutting all diplomatic ties with Qatar), of course this is not directly linked with the situation with Qatar as there are other factors that can affect the price of oil. The two major being Geo political risk particularly with what happening in other parts of the Middle East such as Syrian Crisis and global supply and demand (mainly from developing countries).

This may still have an impact on the price as the dialogue with the countries involved continues. Top 30 countries by oil production [caption id="attachment_57007" align="aligncenter" width="447"] Source Wikipedia [/caption] QIG (Qatari Investors Group) [caption id="attachment_57006" align="aligncenter" width="600"] Source Bloomberg [/caption] It’s worth noting that the Qatari stock market lost around 15 billion dollars in market value (10%) since all diplomatic ties were cut off by the other countries involved. By: Klavs Valters GO Markets

Qatar Diplomatic Crisis 5th June 2017 a diplomatic crisis hit Qatar with seven countries. Saudi Arabia, Bahrain, United Arab Emirates, Egypt Yemen, Libya and the Maldives announced they are cutting all diplomatic ties with Qatar which came as a shock to the rest of the World. Reason? – Saudi Arabia made an announcement via Saudi Press Agency, stating it was taking this step to protect its national security from the dangers of terrorism and extremism and it is believed the rest of the countries have the same reasons for cutting its diplomatic ties with the tiny Gulf nation.

USOUSD Source: GO Markets MT4 Country profile – Qatar Capital: Doha Official language: Arabic Currency: Riyal (QAR) Population: 2,675,522 (2016) GDP total: $353,143 billion Qatar is a member of OPEC (Organization of the Petroleum Exporting Countries ) What has happened so far? » The five Arab states have cut off land, air and sea travel to and from Qatar » The Foreign Ministry of Bahrain have issued a statement to order all diplomats to leave Doha within 48 hours and that all Qatari diplomats should leave Bahrain within the same timeframe » All the involved countries have ordered their citizens to leave Qatar » Saudi Arabia, United Arab Emirates have given Qatari nationals two-week timeframe to leave their countries » Qatar has been expelled from the Saudi led intervention in Yemen » Saudi Arabia, the UAE, Bahrain and Egypt have all said they will close their airspace to Qataris national airline – Qatar Airways » All major airlines, including – Emirates, Etihad Airways, Gulf Air, EgyptAir, Air Arabia, Saudi Arabian Airlines and FlyDubai have suspended their flights to and from Qatar » Qatar Airways have also suspended their flight operation to Saudi Arabia Qatar has since responded to the shock announcements and has called the decisions ‘unjustified’. The statement reads ‘The measures are unjustified and are based on claims and allegations that have no basis in fact’ and it added that the decision will ‘not affect the normal lives of citizens and residents’. The impact It is still too early to see what the effect the diplomatic crisis with have on Qatar’s economy, but since the announcement was made the oil prices moved lower, raising further uncertainty about the oil productions in the Middle East.

Oil prices have dropped more than 4% in the last week, the largest decline since early May. USOUSD Source: GO Markets MT4 Another concern for Qatar is the border, the only way in by land is the border with Saudi Arabia. Every day there are hundreds of lorries which cross the border to supply Qatar with different supplies and one of the main supplies is food, in fact around 40% of Qatar’s food supplies is believed to come via this route, so it is a big concern for Qatar.

It is worth keeping up with further developments in this matter as it could have an impact in the oil markets. -By Klavs Valters GO Markets

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