Earlier in the Day:
Economic data out of the Asian session this morning was limited to New Zealand data, providing further direction for the struggling Kiwi Dollar.
Stats included 3rd quarter current account figures, together with November’s trade data. It was negative all the way on the data, with New Zealand’s trade deficit widening from NZ$2,970m to NZ$3,440m year-on-year. Month-on-month, the trade deficit widened from NZ$843m to NZ$1,193m, which was far worse than a forecasted narrowing to NZ$550m.
November imports stood at NZ$5.8bn, rising above October’s record $5.4bn, with imports rising by $1.2bn (27%) from November 2016. The yearly increase was the largest rise in imports since December 1999, when imports had surged by 62%. The increase in imports was attributed to the import of aircrafts and aircraft parts, motor vehicles, computers and diggers.
Exports rose by 20% to $4.6bn, which was a new November high and the largest percentage increase since January 2014. The increase in exports by value was attributed to milk powder, butter and cheese, with butter prices up a staggering 82%.
New Zealand’s current account deficit narrowed in the 3rd quarter from NZ$7.49bn to NZ$7.1bn, year-on-year, whilst falling short of a forecasted narrowing to NZ$6.9bn.
The Kiwi Dollar moved from $0.69876 to $0.69723 upon release of the data, with the Kiwi Dollar down 0.20% to $0.6958 at the time of writing, the soft numbers coming off the back of a 3.9% fall in the NZ GlobalDairy Trade Price Index according to figures released on Monday.
There was little else for the markets to consider through the Asian session, with the U.S equity markets having closed out the day in the red on Monday, following the House voting in favour of the tax reform bill. In the Asian equity markets, the ASX200 was leading the way at the time of writing, up 0.18% as the markets hit the pause button on news hitting the wires that the House will need to revote on the tax reform bill this afternoon.
Despite the tax reform bill’s procedural error, the Yen was down 0.1% to ¥113 against the Dollar, with the Aussie Dollar down 0.07% to $0.7658.
The Day Ahead:
It’s a relatively quiet European session, with stats out of the Eurozone limited to Germany’s November wholesale price index figures. We won’t expect the numbers to have too much of an impact on the EUR, with forecasts pointing to wholesale price inflation rising at a slower pace last month.
The EUR’s made good ground this week against the Dollar, in spite of Chancellor Merkel continued struggles to form government following the September general election. At the time of writing, the EUR was up just 0.01% to $1.1841, with direction through the day likely to be hinged on market risk appetite and progress on the tax reform bill.