Market quiet ahead of data events
13.5.23 It has been a quiet start to an action-packed week. The key market mover has been weakness in oil prices, down in the order of 4% says BNZ Markets. US equities are modestly higher and the US Treasuries curve is slightly steeper, noyes Jason Wong, senior markets strategist. In currency markets, GBP has underperformed while the NZD is down slightly to 0.6120 against a slightly stronger AUD. “It is a big week ahead with policy meetings from the Fed, ECB and BoJ and some top tier data...
Fresh lows for NZ dollar and AUD
1.6.23 The global bond market has been well supported after a run of weaker economic data while global equity markets are weaker, says BNZ Markets. “CNY, NZD and AUD all hit fresh lows for the year and commodity prices are weaker after softer than expected China PMI data,” notes Jason Wong, senior markets strategist. “After trading sub-0.60, the NZD has recovered to just over that mark. “There has been plenty of economic news to digest and the market has been more attune to the downside than...
US dollar rally in fourth day
26.5.23 The US dollar continues to be well supported, dragging the NZD and AUD down to fresh lows for the year, while the yen continues to suffer against the backdrop of higher global rates, says BNZ Markets this morning. “US equities have been propelled higher after the strong result from Nvidia. Despite some mixed economic data, global rates are higher as the market prices in further hikes from the Fed, ECB and BoE,” adds Jason Wong, senior markets strategist. US debt ceiling negotiations...
Anzac currencies marked lower
12.5.23 Risk appetite is weaker, not helped by further weak China data that has dragged down commodity prices and whacked the NZD and AUD, down below 0.63 and 0.67 respectively, says BNZ Markets. Soft US PPI and another sharp lift in initial jobless claims have helped support US Treasuries, while the BoE hiked 25bps as expected, notes Jason Wong senior markets strategist. “Yesterday, China inflation and credit data were soft, with the PPI falling 3.6% y/y and the CPI barely higher at 0.1% y/y....
US jobs jolt lowers US dollar
US Treasury yields fell, led by the short end, after the much softer than expected US labour market JOLTs report. This dragged the USD down, says BNZ Markets this morning. “Commodity currencies have underperformed the move, the AUD much weaker after the RBA opted for a pause in rates,” says Jason Wong, senior markets strategist. US equities are weaker, led by economically sensitive sectors. “NZ’s QSBO will have comforted the RBNZ a little ahead of another tightening today, with the market...
Oil price spike moves markets
4.4.23 A 6+% gain in oil prices has been the key market mover to kick off the week, after the surprise weekend decision by OPEC+ to cut production, notes BNZ Markets “This pushed up global rates, only to see them fall back after a weak US ISM manufacturing print. Oil-sensitive currencies have outperformed and the USD is broadly weaker, seeing a modest gain in NZD/USD but weaker NZD/AUD. “Oil prices surged on Monday’s open after the surprise move by OPEC+ over the weekend to cut oil production...
NZ dollar drifts lower
16.2.23 A generally stronger set of US data has seen interest rates push up and risk asset prices subdued, notes BNZ Markets. US bond yields are generally higher, led by the longer end, while equities are marginally lower and the US dollar stronger. Commodity prices are generally lower, and the NZD slipped under 0.63. “US retail sales was keenly anticipated and came in hot,” says BNZ Markets senior economist Doug Steel. “Total sales rose 3.0% m/m in January which was stronger than expected...
Canadian dollar has a boomer
13.2.23 The sell-off in the global bond market extended on Friday, with US Treasuries up 4-8bps across the curve. For currencies, CAD outperformed following a boomer employment report, JPY was volatile after reports of a surprise new appointment for the new Governor role but with little net movement by the end of the day, and the NZD closed the week just over 0.63, says Jason Wong at BNZ Markets. The domestic rates market capped off the week with another decent rise in yields across the curve....
Jumbled start for commodity trades
7.2.23 The ANZ World Commodity Price Index eased 1.0% in the first month of 2023. In local currency terms the index dropped 1.2%. “Movements were mixed in January. Meat, forestry and aluminium prices lifted, while dairy and horticulture prices eased”, said ANZ Bank’s agricultural economist Susan Kilsby Global shipping prices continued to retreat during January. The Baltic Dry Index is now at its lowest level since June 2020. Demand for shipping has eased, while the supply of ships has...
Oil and metals on the rise
Global oil prices climbed 1.5-2.0% on Friday along with other key commodities. Increases in Chinese mobility indicators suggested higher demand for oil, reports CommSec. “And a weaker dollar improved buying power of European and Asian buyers. The Brent crude oil price rose US$1.25 or 1.5% to US$85.28 a barrel. The US Nymex crude oil price added US$1.47 or 1.9% to US$79.86 a barrel. Over the week Brent crude rose 8.5% and Nymex rose 8.3% - the biggest weekly gains since October. Base metal...
Commodity prices generally weakening
Aluminium prices prop commodity trade. Photo - NZAS smelter at Tiwai Pt, Bluff. 11.1.23 “The ANZ World Commodity Price Index fell just 0.1% in December, as higher aluminium and dairy prices helped offset weaker returns for meat,” notes ANZ .In local currency terms the index dropped 3.8%, as the NZD appreciated 2.1% against the Trade Weighted Index. Global shipping prices have fallen sharply and are nearing pre-pandemic levels” notes agri-analyst Susan Kilsby. “Demand for container shipping has...
Oil prices brighten up
Global oil prices climbed on Tuesday as the US government forecast record global petroleum consumption next year CommSec also notes that the US dollar hovered near seven-month lows. Global consumption of liquid fuels is forecast to reach 102.2 million barrels per day in 2024. The Brent crude oil price rose US45 cents or 0.6% to US$80.10 a barrel. And the US Nymex crude oil price added US49 cents or 0.7% to US$75.12 a barrel.
Gas supply deal by NZOG
15.12.22 NZ Oil & Gas has signed a new gas supply agreement with South32 Cannington for supply of gas from the Mereenie field. The two-year term from 1.1.23 is for delivery of 0.38 Petajoules (PJ) of gas from NZOG into the East Coast, Australia, domestic market. The fixed price, take-or-pay contract reflects strong market conditions, says NZOG. Gas supplied under the GSA will be aggregated with gas from the Mereenie Joint Venture (Macquarie Mereenie (50%), Central Petroleum (25%), NZ Oil...
Kiwi dollar surges overnight
The New Zealand dollar briefly broken above US$0.65 overnight, following a drop in the US dollar. “Another US CPI downside miss has driven risk appetite higher alongside much lower US rates, supporting equity markets and leading to a large broad-based fall in the USD,” notes Jason Wong, senior markets strategist at BNZ Markets. “NZD, AUD and JPY lead the gains, with the NZD temporarily breaking above 0.65. “Santa Claus has come early for the market with the gift of a second consecutive...
Weaker risk appetite- NZD easier
13.12.22 Some market nerves are evident ahead of a massive week loaded with event risk, with tonight’s US CPI release one of the key acts, says BNZ Markets’ senior market strategist Jason Wong. “Risk appetite is weaker, with a higher VIX and the NZD and AUD underperforming. US Treasuries shows a slightly higher and flatter curve overnight. “There hasn’t been a great deal of news to start the week but the event calendar is filled with plenty of event risk, including central bank meetings of the...
China growth issues surface
22.11.22 Markets have traded with a more cautious tone to start the new week, with equity markets lower and the USD stronger, says Nick Smyth at BNZ Markets this ,morning. Oil prices have fallen on concerns around Chinese growth, as some cities reimpose Covid restrictions, and reports, since denied by Saudi Arabia, that OPEC+ will consider a production increase. Global rates are slightly lower overnight and yield curves are again flatter, the US 2y10y curve pushing down to fresh 40-year lows...
Oil prices push upwards
Global oil prices rose on Tuesday by around 1%, reversing earlier losses. Supporting prices were a weaker US dollar, rising global sharemarkets and hopes of further easing of Chinese Covid restrictions. In addition a European Union ban on seaborne Russian crude, set to start on December 5, means that 1.1 million barrels per day must be replaced, the International Energy Agency said. The Brent crude oil price rose by US72 cents or 0.8% to US$93.86 a barrel. And the US Nymex crude oil price rose...
Dairy auction prices improve
16.11.22 The fortnightly GDT dairy auction saw the price index up 2.4%, breaking a 3-auction streak of falls, with gains of just over 3% for whole milk and skim milk powder. Overall and WMP prices remain down 18% and 19% respectively on the same time a year ago. Prices were mixed by product, with three products posting price rises and three posting falls, notes Westpac. Skim milk powder (SMP) prices matched WMP’s 3.1% price lift, while anhydrous milk fat (AMF) prices rose by 2.7%. “Together...
Oil prices make ground
26.10.22 Global oil prices rose by almost 1% on Tuesday, reports CommSec. The US dollar index fell, making dollar-denominated oil less expensive for other currency holders and helping to push prices higher. “Prices were also supported by supply concerns raised by Saudi Arabia's energy minister. But downward pressure on prices was applied by weaker economic data in Europe and the US. “The Brent crude oil price rose by US26 cents or 0.3% to US$93.52 a barrel. And the US Nymex crude oil price...
Oil prices slide further
13.10.22 Global oil prices fell for a third day, down by around 2.0% on Wednesday. OPEC cut its outlook for demand growth this year by between 460,000 barrels per day (bpd) and 2.64 million bpd, said CommSec. “Also the US Energy Department lowered its expectations for both production and demand in the US. The Brent crude oil price fell by US$1.84 or 2.0% to US$92.45 a barrel. And the US Nymex crude oil price fell by US$2.08 or 2.3% to US$87.27 a barrel. Base metal prices were mixed on the...
Steady dairy auction expected
3.10.22 Westpac expect whole milk powder prices (WMP) to be unchanged at the upcoming auction. This follows a 3.7% price rise at the previous auction. “Our pick is lower than the circa 2% lift that the futures market is pointing to,” says Westpac. “Fundamentally, global dairy prices are being underpinned by very weak global dairy supply. “However, at this auction we are erring on the side of caution as the surging US dollar has made dairy prices more expensive for most dairy buyers. In...
KIwi dollar tumbles in to weekend
Commodity currencies were hammered last week as risk sentiment deteriorates with the NZD falling over 2% on Friday to end the week just below 0.56, notes BNZ Markets. Friday brought an end to another tumultuous quarter, with US equities making fresh lows (S&P500 -1.5%) and commodity currencies tumbling again, says Jason Wong, senior markets strategist. “The NZD was hammered on Friday, ending the week just below 0.56. In contrast, the GBP continued to recover and is now close to where it...
Sterling outperforms as Truss government forms
The USD remains in the ascendency amidst rising Fed rate expectations; DXY hits fresh 20-year high. GBP outperforms and UK curve sees huge steepening move on reports of Truss plan to cap household energy prices, says BNZ Markets this morning. “There has been another big sell off in global bonds overnight with market reacting to a stronger-than-expected US ISM Services index and reports that new UK PM Liz Truss will unveil a massive fiscal stimulus later this week to protect households from...
Commodities Update
5.9.22 * Global oil prices rose by around 0.5% on Friday. The OPEC+ production group is expected to keep oil output quotas unchanged for October at today's meeting. US jobs data supported oil prices. The Brent crude oil price rose by US66 cents or 0.7% to US$93.02 a barrel. And the US Nymex crude oil price rose by US26 cents or 0.3% to US$86.87 a barrel. Over the week Brent crude fell US$7.97 or 7.9% and Nymex crude fell US$6.19 or 6.7%. * Base metals were mixed on Friday. Zinc fell...
Global oil prices up
9.8.22 Global oil prices rose around 2% on Monday, reported CommSec, traders citing firm economic data driving prices, notably stronger export growth in China and Friday's strong US jobs report. “Despite recession fears, the data suggested that demand for oil may not ease as much as expected. “Reuters cited a research report from Goldman Sachs with the broker saying the case for higher oil prices remains strong, with the market in a larger deficit than they expected in recent months.” The...
Dairy price weakness likely
1.8.22 Westpac expect whole milk powder prices (WMP) to drop by around 2% at the upcoming auction this week. “This follows a 5.1% price slide at the previous auction. Commodity prices have corrected lower on growing concerns about the downside risks for global economic activity, and dairy prices have been no exception. “In addition, Fonterra lifted WMP auction volumes for August and September. This move may have increased the downward pressure on prices at least temporarily. “However,...
Base metals higher
25.7.22 Base metal prices were higher on Friday except lead which was flat. Over the week metals rose 0.7-14.2% with nickel up the most and tin up the least, reports CommSec The gold futures rose by US$14.00 an ounce or 0.8% to US$1,727.40 an ounce. Spot gold was trading near US$1,726 an ounce at the US close. Over the week gold rose by US$23.80 or 1.4%. The iron ore futures price rose by US$1.10 or 1.1% to US$104.46 a tonne. Over the week iron ore rose by US$1.39 or 1.3%
Weakening in global dairy demand
20.7.22 Dairy auction prices posted a chunky fall this week, comments Nathan Penny, agri-economist for Westpac. Overall prices slid 5.1%, while key whole milk powder (WMP) prices were down 5.0%. “Prices have effectively been on the wane since March,” says Mr Penny. “In fact, WMP prices have plunged 25% over that period, while overall prices are down 23%. “The price weakness was also broad-based. All five products on offer fell, with skim milk powder prices posting the largest fall (down...
Commodity currencies and UK pound out-perform
8.7.22 Having been gripped by recession fears over recent weeks, markets are trading with a more upbeat tone overnight, notes BNZ Markets. “US equities and commodity prices are higher, the US 10-year rate is back to 3%, while global growth-sensitive currencies, including the NZD, are stronger,” says Nick Smyth. “The EUR remains under pressure though, falling to 1.0150 and bringing parity into closer view. The nonfarm payrolls release is the key market focus in the session ahead. Market...
Kiwi flat on quiet markets
5.7.22. With US markets closed for the Independence Day holiday, trading conditions have been quiet. Commodity currencies have found some favour, although going against the grain the NZD has been relatively flat, says Jason Wong at BNZ Markets. “The yen has underperformed against a backdrop of much higher European bond yields. “With the US on holiday, there has been little news and market movements have been modest apart from a notable lift in European bond yields. This reverses some of last...
