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US equity markets came off record highs, after reporting that the US/China trade deal would be delayed, until December this year. The possible delay has lead to negative speculation surrounding the confirmation of the deal. The 'phase one' US/China trade deal is crucial to markets sentiment and negative speculation does have destructive consequences for markets. European markets have been blessed with some positive economic news, with Services/Composite PMI data coming in stronger than expected, while Retail Sales also showed some improvement. The EUR traded 1.1060, while the GBP slipped back to 1.2850, buffeted by the fire of the Brexit election campaign.
NZ Unemployment numbers were worse than expected, with the headline number rising to 4.2%, but the labour market remains strong and this may be just a correction. The NZD traded above 0.6350, while the AUD drifted back to 0.6875, unsettled by a stronger reserve. The US/China trade deal remains key to market direction, as long as the deal is signed and sealed, equities will continue to test record levels. The stronger Dollar is reflecting the interest rate differential and the RBNZ may consider extending this disparity, with a softer labour market.
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