INSIGHTS, TRENDS AND CASE STUDIES

The biggest news overnight was the finalisation of the NZ Government. Labour’s Jacinda Arden will now be the next Prime Minister following NZ First’s deal to form a coalition government.

Milk It is from Nirvana’s third album ‘In Utero’ and starts with the line ‘I am my own parasite, I don’t need a host to live’. It references Kurt Cobain’s frustration with fame and drug addiction.

The USD has continued to eke out small gains amid ongoing speculation over Fed Chair nomination, US equities are flat (DJ briefly traded above 23k for the first time) and commodities are mixed.

Consumption has held despite consumer worries.

It has been a quiet start to the week in the Northern Hemisphere, but of note the USD is slightly stronger across the board and commodities also had a good night.

It’s now six from seven in terms of core US CPI undershooting expectations (six months at 0.1% including Friday’s September print and just one at the 0.2% consensus estimate that has prevailed for each of these seven months).

It’s been an overnight session marked by generally limited moves in currencies – the Pound the exception – bond yields have been steady-to lower on net, equities down smalls with commodities mixed.

Pink Floyd’s first album without Roger Waters “A Momentary Lapse of Reason (Inflation?)” probably captures the key take-away from the Sep 20 FOMC Meeting Minutes.

It’s been a mix of events in the UK (better data), Europe (no immediate declared Catalan independence from Puigdemont) and the US (Trump tax politics and a softer NFIB report) that have provided the background for limited currency moves overnight.

Gas supply assured but higher prices still probable.

Markets were quiet overnight given the Columbus Day Holiday in the US. Equities were flat (S&P500 0.2%), the US dollar was marginally lower (DXY 0.2%), while the US bond market was closed (note futures were open but with little movement).

Neil Diamonds’ Beautiful Noise was the working title for today’s missive following the latest US payrolls s report on Friday.

After taking a breather, the USD has regained its mojo partly driven by concerns over other currencies along with a supportive domestic backdrop.

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