Mounting tensions between the US and North Korea have given rise to a massive safe haven flow across financial markets as it could result in even a war. In effect, European equity markets remain in a tremendous withdrawal, CHF and JPY are still in demand, gold prices rallies while the Australian dollar is the worst performer among its G10 peers.
While most of attention was turned to mounting tensions between the US and North Korea overnight, we got notable macroeconomic data from the Chinese economy pertaining to price dynamics. Even as both metrics marginally missed projections, it could not be treated as a warning signal. The data coming from the China’s economy over the course of recent months have been really favorable, hence there’s little to be afraid assuming the data is not falsified.
Equity market investors seem to abstain from buying riskier assets following mounting tensions between the US and North Korea. After a try to close a supply gap the DAX (DE30 on xStation5) has deepened its low breaching quite a relevant technical level. Poor moods were seen across Asian markets as well which could justify a more extended decline in Europe.
Today’s RBNZ decision (10pm BST) could be the most important calendar event this week on the markets. The Bank will not only decide on rates but will also issue it’s quarterly monetary policy statement (MPS). This may have far reaching implications for the NZD. Let’s take a look at prospects for this decision and possible consequences for the currency.
Beside the RBNZ meeting the US Department of Energy will reveal its weekly report regarding a change in oil inventories which could affect oil prices quite significantly taking into account where the price is at the chart. Furthermore, the housing data from the Canadian economy will be released as well.
The past two days on the USDZAR were really stormy with a U-turn taking place yesterday. Let’s start with what it happened on Monday which buoyed the South African currency substantially. The ZAR strengthened following a decision of a no-confidence vote against the incumbent President Jacob Zuma who is not liked by investors as well as financial institution. However, all gains were wiped off yesterday as Jacob Zuma managed to survive a no-confidence vote that could have brought an end to his administration.