NZD/USD Fundamental Forecast – September 13, 2016

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Published: Sep 12, 2016, 04:38 GMT+00:00

The NZD/USD took its cues from the decline in the equities markets and the rising US dollar to fall 4 points to 0.7319. All of Asia is seeing red this

NZD/USD Fundamental Forecast – September 13, 2016

The NZD/USD took its cues from the decline in the equities markets and the rising US dollar to fall 4 points to 0.7319. All of Asia is seeing red this morning as FOMC members all seem to be talking up a rate increase ahead of next week’s meeting. The US dollar rallied hard on Friday sending stocks and commodities down.

The VIX, rose to 17.52 on Friday, from 12.6 the previous day to reach the highest since late June when it peaked at 26.72. The index is constructed of implied volatilities of S&P 500 Index options and is known as the investors ‘fear gauge’.

NBR wrote that “The largest currency movements were largely confined to the commodity currencies, reflecting the surge in the VIX and a chunky fall in commodity prices,” said Jason Wong, currency strategist at Bank of New Zealand.

Wong said speculation that central banks are nearing the end of the extraordinary stimulus measures, including the European Central Bank’s failure last week to take further steps while Federal Reserve officials have sounded more hawkish, has contributed to the spike in volatility.

Traders will closely monitor a speech by US Federal Reserve Governor Lael Brainard tonight to gauge if the central bank might hike interest rates next week after all. Today’s speech by Brainard, only announced late last week, follows Friday’s comments by Boston Fed President Eric Rosengren who warned that the central bank might risk overheating the US economy if it waited too long before raising rates again.

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Upcoming Economic Events that you should be monitoring:

September 13, 2016

CNY	FDI – Foreign Direct Investment (YTD) Y	2	4.3
AUD	RBA Assistant Governor Kent Speech	2
CNY	Retail Sales Y	2	10.2	10.3
CNY	Industrial Production Y	2	6	6.1
EUR	Wholesale Price Index M	2	0.2
EUR	Wholesale Price Index Y	2	-1.4
EUR	Consumer Price Index Y	2	0.4	0.4
EUR	Index of Consumer Prices M	2	-0.1	-0.1
EUR	Index of Consumer Prices Y	2	0.3	0.3
EUR	Consumer Price Index M	2	0.1	0
GBP	Producer Price Index – Input M	2	3.3	0.5
GBP	Producer Price Index – Input Y	2	4.3	8.1
GBP	PPI Core Output Y	2	1	1.3
GBP	Producer Price Index – Output M	2	0.3	0.3
GBP	Producer Price Index – Output Y	2	0.3	1.1
GBP	PPI Core Output M	2	0.4	0.2
GBP	Consumer Price Index M	2	-0.1	0.4
GBP	Consumer Price Index Y	3	0.6	0.7
GBP	Core Consumer Price Index Y	3	1.3	1.4
EUR	ECB President Draghi’s Speech	3
EUR	ZEW Survey – Economic Sentiment	3	4.6	6.7
EUR	ZEW Survey – Current Situation	2	57.6	56
EUR	ZEW Survey – Economic Sentiment	2	0.5	2.5
USD	10-Year Note Auction	2	1.503
USD	Monthly Budget Statement	2	-113

Government Bond Auctions

Date Time Country Auction

Sep 13 11:00 Netherlands Eur 2-3bn 0% Jan 2022 DSL

Sep 13 11:10 Italy Holds bond auction

Sep 14 11:05 Norway Holds bond auction

Sep 14 11:30 UK 0.125% 2046 I/L Gilt

Sep 14 11:30 Germany Eur 1bn 2.5% Jul 2044 Bund

Sep 15 10:30 Spain Holds bond auction

Sep 15 11:03 Sweden Holds I/L bond auction

Sep 15 11:50 France Holds bond auction

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