Market News & Analysis


Top Story

NZ CPI overshadowed by Coronavirus

The better tone evident in the U.S. session following a decision by the World Health Organisation to refrain from classifying the Coronavirus as a global health crisis has mostly remained in place during the Asian time zone, despite more deaths being reported this morning.

The latest numbers are 830 confirmed cases, 680 suspected cases, and 25 deaths. 7 more cities have been placed under a transportation lockdown in addition to Wuhan, affecting a total population of over 23 million people, only 1.6 million less than the entire population of Australia!!!

While the number of fatalities represents a 38% increase overnight, traders anxieties are being assuaged by regular updates from Chinese authorities and the advice that despite human to human transition, most fatalities have involved the elderly or those with existing health conditions.

In terms of economic data, the highlight today has been the NZ Q4 headline inflation coming in slightly above expectations at 0.5% q/q and notably higher than the RBNZ’s November MPS forecast of 0.2% q/q.

The annual rate of inflation at 1.9% is now only fractionally below the RBNZs inflation target, and in tandem with the recent improvement in activity and sentiment data, as well as upcoming fiscal stimulus it affords the RBNZ more time to be patient. In response, most analysts have either pushed back or removed entirely their forecasts for RBNZ interest rate cuts in 2020.

Similar to the price action in the AUDUSD post the Australian labour force report, the NZDUSD initially rallied before buyer enthusiasm waned ahead of an unpredictable weekend. 

Technically, my bias is the NZDUSD will trade higher in due course. However, in the short term it is possible the current Wave iv correction may continue a little longer and lower before the uptrend returns.

Should the NZDUSD trade towards the band of support .6530/10 consisting of the 200-day moving average and uptrend support it would offer an appropriate location to assess a long NZDUSD entry looking for a retest of the December .6755 high.

Source Tradingview. The figures stated areas of the 24th of January 2020. Past performance is not a reliable indicator of future performance.  This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.