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The Greenback was able to shrug off post-election jitters, likely on profit-taking from the earlier slide and positioning ahead of the FOMC decision.

Later in the session, the RBNZ announced its decision to keep rates on hold as expected but the Kiwi held its ground despite Governor Orr’s remarks that they’re not ruling out a rate cut.

  • Canadian Ivey PMI recovered from 50.4 to 61.8 vs. 50.9 forecast
  • U.S. EIA crude oil inventories up 5.8M barrels vs. 2.0M forecast
  • U.S. consumer credit fell from $22.9B to $10.9B vs. $15.7B estimate
  • RBNZ kept rates unchanged at 1.75% as expected
  • RBNZ Gov. Orr: Would consider cutting rates if GDP fell short of estimates
  • Orr: Challenge is to lift inflationary pressure

Major Events/Reports:

Trump talks (and tweets)

The POTUS had a pretty busy post-elections day as he gave a press conference at the White House and shared more of his thoughts on the outcome.

Trump started off by highlighting how the candidates he supported did very well and how their campaigning was able to stop the “Blue Wave” of Democrats. Still, he showed willingness to work together by saying that it’s time to put partisanship aside and get things done in terms of infrastructure and healthcare.

On his Twitter account, he posted about the replacement to Attorney General Jeff Sessions who has resigned from his post:

Risk-taking back in play

After its shaky reaction to the U.S. midterm elections, equity indices got back on their feet and posted strong gains for the day:

  • Dow 30 index is up 545.29 points to 26,180.30 (+2.13%)
  • Nasdaq is up 194.79 points to 7,570.75 (+2.64%)
  • S&P 500 index is up 58.44 points to 2,813.89 (+2.12%)

Meanwhile, gold returned some of its safe-haven winnings, but crude oil was also in the red due to higher than expected stockpiles as reported by the EIA.

  • Gold is down to $,1226.33 per troy ounce (-0.07%)
  • WTI crude oil is down to $61.63 per barrel (-0.92%)

RBNZ decision and presser

As expected, the New Zealand central bank decided to keep interest rates on hold at 1.75% for the nth time. Their official statement indicated that policymakers saw the OCR is still on track for a hike by the Q3 2020.

Apart from that, the RBNZ also upgraded their inflation forecasts but highlighted upside risks to their inflation outlook. Still, they cautioned that there are downside and upside risks to their growth and inflation forecasts and that the timing and direction of their policy adjustments remain data-dependent.

During the presser, RBNZ Governor Orr acknowledged that their challenge is to lift inflationary pressures. He added that he is not taking the possibility of a rate cut off the table, especially if GDP comes in below their expectations. Orr noted:

“We will keep the OCR at an expansionary level for a considerable period to contribute to maximising sustainable employment, and maintaining low and stable inflation.”

Policymaker also seemed content with the Kiwi’s current levels, citing that it will support export earnings.

Major Market Mover(s):

NZD

The Kiwi held on to its top spot and went for more gains as the RBNZ made some adjustments to its inflation and OCR forecasts.

NZD/USD spiked to a high of .6794; NZD/JPY soared from 76.71 to 77.07; EUR/NZD slipped to a low of 1.6828; GBP/NZD is down to 1.9350, and AUD/NZD dipped to 1.0724.

JPY

The lower-yielding yen stayed behind its peers as the dollar steadied on easing fears that the Trump administration’s fiscal stimulus might be reversed.

USD/JPY rebounded from 113.14 to 113.63; AUD/JPY edged higher to 82.62; GBP/JPY is up to 149.14; CAD/JPY climbed from 86.29 to 86.78, and CHF/JPY is up to 113.37.

Watch Out For:

  • 11:50 pm GMT: Japanese core machinery orders m/m (9.5% drop expected after previous 6.8% gain)
  • 11:50 pm GMT: Japanese current account balance (1.36T JPY surplus expected)