The Kiwi Dollar has come under heavy selling pressure in the last hour falling a big figure following the RBNZ decision. The central bank maintained its overnight cash rate at 1.75%, but traders clearly saw the statement has highly dovish. Governor Wheeler indicated that core inflation has been soft and that house prices have been easing. He saw the 5% drop in NZD in recent months as encouraging and indicated that a lower exchange rate would help exports. US indices struggled to make headway Tuesday. President Trump’s decision to fire FBI Director Comey caused a firestorm in the media but early gains by gold and other defensive havens faded through the day. The most important reads from this fiasco for traders has been that President Trump is unpredictable, events that can distract the President and Congress away from the economic agenda can flare up any time, and that complacency is dangerous. Comments from Boston Fed President Rosengren calling for three more Fed rate hikes this year and a start to shrinking the Fed’s bloated balance sheet shored up the US Dollar. I still think a potential budget battle and government shutdown could keep the Fed on the sidelines in September. The shining star on a sloppy day was crude oil with Brent and WTI posting 4% gains and Brent regaining $50.00. US DOE oil inventories fell 5.2 mmbbls, confirming yesterday’s API report, way above the 2.0 mmbbls the street had expected. This indicated that the supply/demand situation in the US has turned the corner and that the winter of big increases is truly over as summer driving season approaches. Gasoline gained 3.9% on the day while natural gas rallied 2.3%. The energy commodity rally also helped to boost oil and gas shares and resource currencies. Energy shares in the US gained 1.3% topping the S&P leader board, followed by technology and telecom. Industrials, Health Care and Consumer sectors underperformed. With base metals also bouncing back from recent declines, the resource heavy Canadian S&P/TSX index outperformed its US counterparts, gaining 0.4% with the rebound in Valeant Pharmaceuticals also helping. A resource rebound bodes well for trading in Australian stocks today. AUD has been bouncing back overnight although not as much as CAD. The loonie has not only benefitted from the oil price rebound but also the possibility that President Trump may be shifting his sights away from trade disputes toward domestic distractions, taking some of the pressure off. US traders responded to earnings reports sending Nvidia shares soaring 17.0% and Electronic Arts shares rallying 13.9% on the back of positive earnings reports. Disney, on the other hand, fell 2.75% as weak sales and struggles at its cable channels offset positive earnings. Thursday the focus shifts to the UK. Although the Bank of England is expected to do nothing in the middle of an election campaign, comments in the inflation report could impact speculation on future moves. UK industrial production may also attract some attention. In the US, producer prices are due heading toward Friday’s CPI and retail sales reports. Corporate News There have been no major corporate reports after the US close today. Economic News Significant announcements released overnight include: RBNZ interest rate 1.75% no change expected US DOE crude oil inventories (5.2 mmbbls) vs street (2.0 mmbbls) US DOE gasoline inventories (0.1 mmbbls) vs street 0.2 mmbbls US DOE distillate inventories (1.5 mmbbls) vs street (0.8 mmbbls) Upcoming significant economic announcements include: (Note: 11:30 am in Sydney/Melbourne is currently 1:30 pm in Auckland, 4:30 pm in Vancouver, 7:30 pm in Toronto/Montréal, 12:30 am in London and 8:30 am in Singapore) 8:45 am AEST NZ food prices previous (0.3%) 9:30 am BST UK industrial production street 2.0% 9:30 am BST UK manufacturing production street 3.0% 9:30 am BST UK trade balance street (£3.0B) 6:25 am EDT FOMC Dudley speaking 12:00 pm BST Bank of England decision no changes to interest rates or QE expected 12:00 pm BST Bank of England inflation report 8:30 am EDT Canada new house prices previous 3.3% 8:30 am EDT US producer prices street 2.2% 8:30 am EDT US core PPI street 1.6% 8:30 am EDT US jobless claims street 245K 10:30 am EDT US natural gas street 55 BCF