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Friday, August 23, 2019

Reuters came out with news, quoting the US State Department official, signaling additional hardships for the much-debated Iran’s oil tanker on early Friday.

Reuters came out with news, quoting the US State Department official, signaling additional hardships for the much-debated Iran’s oil tanker on early Friday morning in Asia. Key quotesThe United States will aggressively enforce its sanctions to prevent the private sector from assisting an Iranian oil tanker that is traveling through the Mediterranean and that Washington wants seized.All parties in the shipping sector should conduct appropriate due diligence to ensure that they are not doing business with nor facilitating business for, directly or indirectly, sanctioned parties or with sanctioned cargo.FX implications The news indicates a likely increase in the US-Iran tension and can keep fueling the safe-havens like the Japanese Yen (JPY) and Gold. It should also help increase the WTI Crude Oil prices as Iran is one of the world’s key oil producers.

During an interview with Fox News on early Friday in Asia, White House Economic Adviser Larry Kudlow said that US and Chinese officials had a productive call.

During an interview with Fox News on early Friday in Asia, White House Economic Adviser Larry Kudlow said that US and Chinese officials had a productive call on Wednesday and he is still planning for the September meeting of the US-China diplomats. Key quotes US and China officials had productive call Wednesday. Still planning for Chinese team to come to US in September. Looking at tax cuts to improve long-term growth of economy, not to deal with short-term weakness. Short-term payroll tax cut unlikely, but personal rates could be lowered. Could see some tax cuts before 2020 US election. FX implications Although the news failed to get any market reaction, as investors are highly concerned about the Jackson Hole Symposium, it can help receding fears of the global economic slowdown that have been dominating market sentiment off-late.

Early Friday at 22:45 GMT sees the quarterly retail sales data from the Statistics New Zealand.

Overview of quarterly retail salesEarly Friday at 22:45 GMT sees the quarterly retail sales data from the Statistics New Zealand. Despite a 50 basis points (bps) cut to the benchmark cash rate, the Reserve Bank of New Zealand (RBNZ) hasn’t stopped favoring bears, which in turn highlights the importance of each incoming data to strongly affect the Kiwi central bank’s next policy moves. With the recently announced Credit Card Spending being on the downside, chances of a soft print from the headline retail sales data can’t be denied. Not only the headline Retail Sale but the Retail Sales ex-Autos also grew 0.7% during the first quarter (Q1) on a QoQ basis. TD Securities expect little downside change in the upcoming data as it said, After real retail sales rose 0.7% in Q1, we forecast a smaller 0.2% rise in retail sales volumes in Q2, with declining levels on consumer confidence weighing on activity.How could it affect NZD/USD?The NZD/USD pair is already testing multi-year low amid fears of global recession and the RBNZ’s bearish bias. As a result, any more weakness in the headline economic data could further drag the Kiwi pair towards the south. On the contrary, the pair is likely to recover some of the latest losses on the surprise upbeat releases (except being a small increase in the number). Technically, the quote remains weak unless breaking the June month low of 0.6487 on the upside, which in turn keep pushing it towards January 2016 low of 0.6348 and then to September 2015 bottom surrounding 0.6235. Alternatively, August 07 trough of 0.6377 and October 2018 low near 0.6424 can satiate short-term buyers during the pullback.Key NotesNZD/USD: On the back foot around multi-year low with eyes on New Zealand retail sales NZD/USD technical analysis: Struggles near multi-year lows, well below 0.6400 handleAbout New Zealand Retail SalesThe Retail Sales released by the Statistics New Zealand measures the total receipts of retail stores. Quarterly percent changes reflect the rate of changes of such sales. Changes in Retail Sales are widely followed as an indicator of consumer spending. A high reading is seen as positive (or bullish) for the NZD, while a low reading is seen as negative (or bearish).

DJIA, +0.19% added 51 points, or 0.2%, to finish around 26,254. The S&P 500 lost less than 0.1% to end near 2,923. Nasdaq Composite fell 0.4% to clos

 DJIA, +0.19% added 51 points, or 0.2%, to finish around 26,254. The S&P 500 lost less than 0.1% to end near 2,923.Nasdaq Composite fell 0.4% to close near 7,991.On Wall Street, the standout stock was Boeing which rally helped to support the DJIA into a positive close. The Dow Jones Industrial Average DJIA, +0.19% added 51 points, or 0.2%, to finish around 26,254 while the Nasdaq Composite fell 0.4% to close near 7,991. The S&P 500 lost less than 0.1% to end near 2,923.  The moves come ahead of a bog deal in markets with Jackson Hole getting underway and the G7. Markets will be watching Chair Powell's remarks at the Jackson Hole Symposium at 10am EDT on Friday for direction at this point. Jackson Hole "Given current pricing for a further 60bp of rate cuts in 2019 and 40bp more cuts in 2020, we believe markets will come away disappointed as Powell is unlikely to pre-commit to rate cuts. This could weigh on equities and bull flatten the Treasury curve," analysts at TD Securities explained: "We do not anticipate significant announcements by Powell regarding the policy outlook. If anything, we would expect him to reiterate his post-FOMC press conference message, where he argued that the Fed was embarking on a "mid-cycle adjustment" in policy. We also expect policymakers to stay non-committal in their guidance for future rate cuts and state that they will remain watchful of upcoming data and developments on global growth and trade uncertainty." US data The Markit Purchases Manufacturing Index (PMI) fell to 49.9 to enter the contractionary zone for the first time in a decade. "New orders and export sales fell to their lowest level since August 2009. The wider composite index which takes into account both manufacturing and services fell to 50.9. Meanwhile, the US Leading Economic Index lifted 0.5% in July to indicate moderate growth in H2 2019," analysts at ANZ Bank noted. DJIA levels Meanwhile, from a technical perspective, the DJIA is holding onto the 26000s heading still. A push to the upside will open that case for the 50-DMA with the 26700s as a key upside target for the bulls. Bears, on the other hand, can target the 50% mean reversion level of the late Dec 2018 swing lows and mid-July swing market highs down in the 24500s.   

Having plummeted to fresh low since January 2016, NZD/USD takes the rounds to 0.6366 at the start of Friday’s Asian trading session.

Kiwi seesaws near multi-year low amid fears of a global economic slowdown.New Zealand Q2 Retail Sales will be in the spotlight for now while major market attention holds on to updates from Jackson Hole Symposium.Having plummeted to fresh low since January 2016, NZD/USD takes the rounds to 0.6366 at the start of Friday’s Asian trading session. On Thursday, sluggish Manufacturing Purchasing Managers’ Index (PMI) from major economies renewed fears of the upcoming recession and pushed markets off commodity-linked currencies. The Kiwi was already trading near the yearly low and hence a technical breakdown also contributed towards making it the worst performer among the G10 currencies. Also adding to the pair’s weakness is continued uncertainty surrounding the US-China trade deal as the US President Donald Trump keeps shifting from his words on the developments while there are no clear-cut statements from China. Recently, the White House Adviser Larry Kudlow said that there was a productive trade discussion (via a call) between the US and Chinese diplomats on Wednesday and he is still planning for Chinese team to come to the US in September. Additionally, latest comments from the regional Fed leaders, namely Esther George and Patrick Harker, have been upbeat and strengthen the US Dollar (USD), offering extra weakness to the pair. Moving on, New Zealand’s second-quarter (Q2) Retail Sales will gain trader’s immediate attention whereas broad market concerns will keep sticking on to what the global central bankers speak at the Jackson Hole Symposium over the weekend. The Retail Sales and Retail Sales ex-Autos both previously rose 0.7% and might weaken further considering the latest slew of downbeat data points, which in turn can drag the Kiwi further to south. However, a surprise increase will be capable of reversing a major chunk of latest losses. Technical Analysis While January 2016 low of 0.6348 becomes the immediate support to watch, additional declines might not hesitate to visit September 2015 low surrounding 0.6235. On the upside, pullback beyond August 07 low of 0.6377 can propel prices to October 2018 low near 0.6424 but the further increase is less likely unless rising past-June low of 0.6487.

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