Summary:
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NOK surges as Norges Bank delivers a hawkish message
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European stock markets decline despite initial strength
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OPEC meeting kicks off today
After opening higher European indices made a U-turn and are now trading noticeably below their yesterday’s closing prices. The biggest declines are observed on the Italian and German stock markets. Two out of three interest rate decision from Europe were already made and now the attention shifts to the Bank of England. On the currency front NOK outperforms its peers from the G10 basket thanks to more hawkish Norges Bank. On the other hand the Swedish krone is the weakest currency within the group. As USD is also strengthening we are witnessing a pull back on the precious metals market.
Over the course of the past hours we were offered monetary policy decisions from the SNB as well as the Norges Bank. While the former had a tiny impact on the Swiss franc lifting inflation forecasts for this year, and lowering them for the longer term, Norwegian policymakers underpinned the krone suggesting a rate hike is likely to take place as soon as September.
Goldman Sachs CEO Lloyd Blankfein openly admitted he did not own any Bitcoins or other cryptocurrencies, but at the same time, he did not rule out the most famous cryptocurrency could have a future. He attended in talks at the Economic Club of New York on Tuesday where he was explaining how the world moved from gold to fiat currencies which right now are backed solely by governments.
Earlier this week the German Chancellor Angela Merkel along with the French President Emmanuel Macron once again called for a revamp of the euro zone economy. Almost a decade after the financial crisis the European economy still finds it hard to embrace a longer lasting acceleration. Two leaders have won a strong ally yesterday as ECB President Mario Draghi expressed his support for the idea during the conference in Sintra.
Asian trading is bringing quite a heavy sell-off of the NZ dollar even as the GDP release for the first quarter met expectations. Growth during the first three months of 2018 totalled 0.5% and 2.7% in quarterly and annual terms respectively. Both figures turned out to be in line with the median consensus, albeit there was a slowdown compared to the fourth quarter.
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