The market has milked as much ado about nothing out of President Trump's NY speech. One of our banks reckons all trade headlines should be taken with a grain of salt; I'm thinking a keg.
US dollar
US President Trump's comments Tuesday on the US-China trade negotiations were slightly risk-negative, but UST's haven't gained any territory on the back of that, and hence the greenback is holding firm. The near-term key will be tonight's US CPI data, but for now, there seems little point to fade the US dollar strength.
Yen
USD/JPY is trading around 109.00 in a sedative fashion as London kicks into gear. The buying interest below 108.50 is intact, while sellers come in every time the pair gets close to 109.50 The markets will continue to toggle risk on risk-off as to the degree and intensity of trade talk headlines.
Kiwi
The Kiwi grabbed the spotlight after the RBNZ delivered a considerable surprise and kept its OCR rate on hold at 1.0%. NZD/USD surged from around 0.6330 to a high of 0.6417. Turnover has been very high and is approximately 150%% above the recent average.
The RBNZ's MPC said it didn't mean to surprise the market, although it did. It noted further stimulus would be added if needed and that rates will need to stay low for a prolonged period. Governor Orr said there are signs that previous rate cuts are having an impact. He also said that a weak currency had supported earnings.
Gold Markets
It seems old habits die hard as gold remains resilient in the face of shifting trade headlines. Gold rallied amid confusing signals over the extent of progress made in U.S.-China trade talks and concern about intensifying unrest in Hong Kong hurt demand for risky assets. But the fact gold is struggling just above $1460 doesn't support the notion that it's attracted massive safe-haven type flows.
The Hang Seng has taken another slump, weighed down by continued tensions in Hong Kong. However, despite this, USTs are lower, which isn't exactly a green light to buy gold.
Oil markets
The markets remain mired in a range by the lack of new drivers, with price movements largely following sentiment on the outlook for the OPEC+ agreement and US-China trade. Both colossal headline risk, even if the headline in itself is not colossal.