Monday

New Zealand reported its employment changes on Monday whilst America labelled China as a currency manipulator, escalating the trade war into a new dimension. 

New Zealand unemployment Rate was reported at 3.9%, down from 4.2% last quarter and the lowest since June 2008. The government also raised minimum wages to $17.70 per hour back in April which recently showed a boost in private sector pay rates. 

After Trump imposed more tariffs on China last week, the Chinese yuan weakened against USD pass the seven-dollar level, first time since 2008. Shortly after, the US Treasury Department labelled China as a currency manipulator since a weaker Yuan makes Chinese exports more competitive, cheaper to buy with foreign currencies. US indices took a major hit on Monday. The DJIA was down 767 points and S&P 500 down 3% from record highs, recording the worst trading day in 2019 so far. 

Tuesday

News out of Australia and New Zealand as they reported their official Bank rates. Board at the Reserve Bank of Australia decided to keep the rate unchanged at 1% as the outlook for the global economy seems reasonable and global financial conditions remain accommodative. Meanwhile, the Reserve Bank of New Zealand cut its rates to 1%, necessary to meet its employment and inflation objectives. AUDUSD dropped 1.5% after the news and NZDUSD dropped 2.5%, as markets forecasted a 0.25 change in the rates, but Reserve Bank of New Zealand delivered a bigger cut. 

Wednesday

No big news delivered on Wednesday. DJIA opened around 250 points lower and had dropped significantly lower on trade tensions before closing relatively unchanged late afternoon.

Thursday

The Reserve Bank of Australia reported its Monetary Policy Statement outlining current economic conditions and the outlook for inflation and output growth. The Australian economy is going through slow growth with strong employment. Despite strong employment, unemployment rate has increased to 5.2% and inflation remains subdued. Future changes in the rates will be to support sustainable growth in the Australian economy. 

On the contrary, Global equities recovered on Thursday from its plunge on Monday as China might continue to allow a weaker yuan. The DJIA rose 371 points while the S&P gained just under 2%. 

Friday

Statistics Canada released its July unemployment report as it stated a 0.2 percentage point increase as more people searched for work. Little changed for the third consecutive month in July. 

Equities closed negative as warnings from Trump regarding cancelling scheduled trade talks. DJIA dropped 0.75% during the week and the S&P little unchanged as the indices rebounded from early week chaos. USDCAD erased all its weekly gains and closed 13 pips higher with pound sterling taking major hits against all other major currencies. 

Very slow week economically next week with just Australia reporting its unemployment data but Equities still remain risky with global tensions and trade talks in the air. 

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Writer: Saket Patel

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