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China says they are in full swing with the US on a trade deal

  
Analysis, Economy

Comments by China’s commerce ministry

US China
  • Liu He, Lighthizer, Mnuchin to hold trade talks later today
  • They will be having a working dinner later today
  • US delegation set to arrive in the afternoon
  • Reiterates that Liu He will go to Washington next week
  • Both sides have achieved progress in phone calls, but there remains much work to do
While plenty of focus remains on what’s happening in bonds and Brexit, US-China trade talks will be resuming today and tomorrow before continuing again next week. Let’s see if they can make any further progress this time around. But once again, I wouldn’t be holding my breath counting on that to happen. We’ve been down this road one too many times.

New Zealand dollar extends decline but the previous drop is instructive

  
Analysis, Forex

NZD/USD hits a session low

NZD/USD hits a session low
The New Zealand dollar was cut down in Asia-Pacific trading after the RBNZ surprised markets by shifting to an outright dovish bias.
” Given the weaker global economic outlook and reduced momentum in domestic spending, the more likely direction of our next OCR move is down,” the statement said, warning that the global economic outlook had weakened.
NZD/USD immediately fell 100 pips to 0.6810 and has mostly chopped sideways from there but with a negative bias. It has grinded to a fresh low of 0.6787.
Looking at the chart, today’s decline mimics a similar drop on February 6. That was a day when the RBA shifted to neutral from hawkish. Note that NZD continued to fall for a couple more days before finding support at 0.6725, just above the previous low.
It will need to do something similar to halt the decline this time.

European stocks end the day mixed

  
Analysis, Global Indices

Winners and losers today

The Eurioean stocks are closed and the major indices are mixed:
  • German Dax, unchanged
  • France’s CAC -0.12%
  • UK FTSE unchanged
  • Spain’s Ibex +0.53%
  • Italy’s FTSE MIB, +0.27%
  • Portugals PSI20, +0.46%
In the 10 year benchmark note sector, yields are mostly lower:
The benchmark 10 year yields are mostly lower in Europe

Ranking the strongest and weakest currencies today, the JPY remains the strongest currency followed by the GBP. The NZD remains the runaway weakest after the surprice tilt by the RBNZ last night.

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