US dollar weaker after Powell conference
The latest policy update by the US Federal Reserve didn’t offer any surprises but US rates and the US dollar fell during chair Jerome Powell’s press conference, according to BNZ Markets today. “The clear message was one of an easing bias, with a rate hike “unlikely”,” commented Jason Wong , senior markets strategist.” As we go to print, US Treasuries are down around 10bps on the day and the NZD is trading at its highs, up towards 0.5940. The Fed kept policy steady and introduced new language...
US economic data jolts market
Investor risk sentiment was undermined into April month end by US economic data that revealed persistent wage pressures and a sharp fall in consumer confidence, says BNZ Markets this morning. The S&P fell close to 1% and looks set for its weakest monthly performance since September, notes Stuart Ritson. European stocks were also under pressure. Global bond yields moved higher and the US dollar advanced. The employment cost index (ECI), which is closely monitored by the Federal Reserve,...
Volatile session for the Yen
Risk appetite is slightly higher at the start of the new week, notes BNZ Markets this morning. The key market movement has been yen volatility, with signs of official intervention after the currency cratered in early Asia trading. USD/JPY has traded within a 3.5% range and has settled around 156. The USD is broadly weaker, and the NZD has pushed up towards the 0.60 mark. Global rates are modestly lower. “In illiquid trading conditions in early Asia yesterday, with Japan on holiday, the yen...
US dollar stronger – Japan holds firm
The US dollar finished the trading week with strength against developed market currencies and the Kiwi dollar traded lower according to BNZ Markets this morning. The core PCE deflator, which is Federal Reserve’s preferred inflation gauge, increased 0.3% in March. This was in line with median forecasts, says Stuart Ritson, senior fixed interest strategist. The 2.8% annual rate was marginally above expectations and unchanged from March. Quarterly PCE deflator data, released the previous day, had...
US GDP moves higher
The US GDP report released overnight could be described as anti-Goldilocks, with both weaker growth and higher inflation than expected, says BNZ Markets this morning. The rates market was more focused on the latter than the former, seeing a further paring of US rate cut expectations, sending yields higher, comments Jason Wong, senior markets strategist. “A stronger USD reaction wasn’t sustained and the NZD is little changed at 0.5945 from where we left it ahead of the ANZAC day holiday. “The...
Contrasting economic activity reports
Contrasting business activity readings in the UK and US set part of the backdrop for trading on markets overnights. Investor risk appetite has continued to recover underpinning global equities. The S&P gained more than 1% as the market looks ahead to corporate results from large technology companies. The FTSE 100 traded to a new all-time high before retracing amid a broad-based rally across European stocks. BNZ Markets senior interest rate strategist Stuart Ritson noted that US treasury...
KIwi dollar flat and steady
Risk appetite is higher as Middle East tensions settle. US equities have rebounded after a weak run, the UK FTSE100 closed at a fresh closing high and commodity currencies have outperformed, notes BNZ Markets this morning. “The NZD has consolidated above the 0.59 mark and is flat to higher on the key major cross rates,” says Jason Wong, senior markets strategist. “There have only been small changes in US Treasury yields. It has been a typically quiet start to the week. After a streak of three...
Kiwi dollar at fresh 2024 low
Global equity markets traded lower on Friday, but pared the worst of the losses that came amid a sharp rise in investor risk aversion following news that Israel had launched retaliatory strikes against Iran, says BNZ Markets this morning. “Risk sentiment recovered after Iran’s state media played down the damage from the attacks raising hopes that the hostilities wouldn’t escalate into a broader conflict,” notes Stuart Ritson, senior fixed interest strategist. US treasuries ended little...
Strong US dollar caps Kiwi
Newsflow has remained light, generating modest movements in asset prices, says BNZ Markets this morning. “US equities are down modestly while US Treasury yields have pushed higher, with a stronger Philly Fed survey and hawkish Fed-speak not helping.,” notes Jason Wong, senior markets strategist. The USD is broadly stronger, reversing the previously day’s loss, with the NZD nudging down to 0.59. “It's looking like a quiet end to the week with not much newsflow to drive markets. US Treasury...
High CPI nudges Kiwi dollar up
There is a modest risk-off tone in the air, with US equities weaker, US Treasury yields lower, credit spreads wider and oil prices weaker, notes BNZ Marjets this morning. “Currency movements haven’t been affected by the risk-off move, with the USD broadly weaker overnight,” says Jason Wong, senior markets strategist. “The NZD and AUD have been the best performers over the past 24 hours, with higher rates post the NZ CPI supporting a move for the NZD above 0.59, which has been sustained...
US rates high for longer
17.4.24 Global bond markets remained under pressure overnight, notes BNZ Markets this morning. “US treasuries yields made fresh highs for the year which constrained equity market performance,” says Stuart Ritson, senior interest rate strategist. The S&P was marginally lower in early afternoon trade, with limited rebound from recent weakness, despite trading at one-month lows. The VIX gauge of US stock market volatility remained elevated reflecting the uncertain geopolitical backdrop. In...
Cautious tone on financial markets
Markets continue to trade with a cautious tone, with Israel vowing to retaliate against Iran’s weekend attack, notes BNZ Markets this morning. US equities are down close to 1% and oil prices are barely lower, with Brent crude about US$90. US Treasury yields rose to fresh 2024 highs, with much stronger than expected US retail sales being a factor. “The USD has been well supported, with the yen, NZD and AUD notable underperformers, weakening to fresh lows,” says Jason Wong, senior markets...
Risk aversion on financial markets
Risk aversion gripped global assets markets into the end of last week amid rising geopolitical tensions, says BNZ Markets this morning. There were growing concerns that Iran could launch a retaliatory attack on Israel following the air strike on the Iranian consulate in Syria “Over the weekend, Iran’s military seized an Israeli-linked container ship, and launched drones and missiles towards Israel, in a significant escalation of hostilities. These developments will weigh on investor rise...
NZD and AUD outperform
Markets have settled after the shock from the hot CPI print in the US the previous night, helped in part by a more benign PPI print, notes BNZ Markets this morning. US Treasury yields show only small movements, with a modestly steeper curve led by a retracement in the 2-year rate, says Jason Wong, senior markets strategist. The 10-year Treasury found support with yields just under 4.6% overnight. US equities have bounced back. The ECB’s in-line policy update had little impact on the market,...
US inflation jolt for markets
11.4.24. Stronger than expected US CPI data, contributed to a reassessment about how soon the US Federal Reserve might cut rates, and prompted large moves across global asset markets, notes BNZ Markets this morning. US treasury yields surged higher contributing to broad based gains in the US dollar, says Stuart Ritson, senior fixed interest strategist. The higher rates backdrop undermined equites. The S&P fell more than 1% to retest the lows near 5140 from last week. US inflation rose 0.4%...
Market awaits NZ MPS and US CPI
It has been another uneventful day in financial markets, with the key move being a steady fall in US Treasury yields after the recent lift to 2024 highs, ahead of tonight’s key US CPI report, notes BNZ Markets. US equities are down modestly. Currency moves have been small in net terms although the NZD and AUD remain on the positive side of the ledger as global commodity prices continue to push higher. “The week continues with a lack of newsflow to drive markets but that could all change...
Commodity currencies remain firm
9.4.24 Market movements have been well contained to kick off the week without any key catalysts to perturb pricing, says BNZ Markets this morning. Jason Wong, senior markets strategist, notes “There was a total eclipse of the sun in the US and a total eclipse of the year-to-date highs for US rates overnight, before they settled back down, seeing the 10-year Treasury yield little changed from the NZ close.” US equities are slightly higher and the USD is slightly weaker. “The NZD and AUD have...
Strong US jobs data stirs markets
8.4.24 US equities advanced following labour market data which pointed towards a resilient US economy and intensified the debate about when the US Federal Reserve might begin to ease monetary policy, says BNZ Markets. The S&P gained more than 1%, rebounding from the weak previous session, which saw the index fall more than 2% from intra-day highs and the VIX spike to the highest level this year, added Stuart Ritson, senior fixed interest strategist. “US treasury yields moved higher while...
NZ and Aussie dollars out-perform
The US dollar is broadly weaker, with the NZD and AUD outperforming against a backdrop of rising commodity prices, notes BNZ Markets this morning. The NZD is trading at 0.6045, with NZD/AUD falling to a 9-month low around 0.9130. Risk appetite is higher ahead of the key US employment report tonight, says Jason Wong, senior markets strategist. Equity markets are stronger, with the S&P500 up 0.7% and Treasury yields show little net movement. US initial jobless claims increased 9k last week...
US dollar takes a tumble
In currency markets, the US dollar fell sharply on markets overnight, notes BNZ Markets this morning. “Gold prices extended to fresh record highs, above US$2290 per troy ounce, having gained more than 15% since mid-February,” says Stuart Ritson, senior fixed interest strategist. Federal Reserve chair Powell’s speech on the economy didn’t provide additional information on the outlook for monetary policy. He reiterated the central bank remains data-dependent, and that the market should...
US yields rise with oil price push
3.4.21 Global rates are higher, with the US 10-year Treasury yield reaching a fresh high for the year of 4.40%, not helped by oil prices rising to fresh year-to-date highs, notes BNZ Markets this morning. Equity investors are showing further signs of fatigue, with the S&P500 close to 1%. Currency moves have been modest but, despite weaker risk appetite, the USD is broadly weaker and the NZD is up slightly overnight to 0.5965, says Jason Wong, senior market strategist. In overnight trading,...
Support for USD, yen outperforms
2.4.24 Stronger than expected US ISM manufacturing data contributed to sharply higher treasury yields, which supported the dollar, and saw US equities start the new quarter on a soft note, comments BNZ Markets this morning The S&P was down 0.4% in early afternoon trade. Gold prices retreated from record highs near US$2265 per ounce. China equities made strong gains with the CSI 300 Index up more than 1.5%, supported by a rebound in manufacturing activity. The manufacturing PMI rose to the...
Yen has a see-saw session
The yen fell overnight to its lowest level against the US Dollar since 1990 in Asian trade with interest rate differentials continuing to weigh, says BNZ Markets. USD/JPY reached highs just below 152, which prompted a round of verbal intervention by Japanese policymakers and raised the probability of actual intervention by Japanese authorities, for the first time since 2022, said senior fixed interest strategist Stuart Ritson. Finance Minister Suzuki said ‘we will take bold action against...
Currency moves on the mild side
Market price action has been limited by a lack of newsflow, says BNZ Markets this morning. Currency movements has been remarkably well contained, with the NZD steady just over the 0.60 mark. Global equity markets show small gains while global rates also show only small movements. “It has been another uneventful trading session with no catalysts to significantly impact the market,” says Jason Wong, senior markets strategist. “US data releases were mixed, with conflicting evidence on the state...
Kiwi dollar hovers around US$0.60
The NZ dollar spent Monday hovering around 0.60, some support gleaned from the Peoples Bank of China supporting the yuan after its surprising neglect on Friday, notes BNZ Markets. “It is a quiet week ahead on the calendar ahead of Easter, with most interest in the US PCE deflators released on Friday, but even so, the CPI and PPI figures that feed into that release should reduce the scope for any major surprise,” said Jason Wong, senior markets strategist. “Our main interest in markets at the...
NZ dollar drops vs greenback
In the absence of first tier economic data, US treasuries yields declined, and the US dollar advanced, notes BNZ Markets this morning. Global equity markets were mixed with the S&P ending little changed on the day but 2.3% higher over the course of last week, which was the largest advance in 3 months, says Stuart Ritson, senior interest rate strategist. The Chinese yuan reached the lowest level against the US dollar in 4 months weighing on Australasian currencies. The yuan fell sharply...
Surprise Swiss central bank rate cut
Last night a surprise rate cut by the Swiss National Bank got the market’s attention but spillover to the key markets has been limited, says BNZ Markets. European yields have pushed lower against little change in US Treasury yields. USD weakness after the Fed’s policy update yesterday has completely reversed, notes Jason Wong, senior markets strategist. After a brief look above 0.61, the NZ dollar is trading down to 0.6045. NZD/AUD has fallen below 0.92. We have previously written about...
US Fed sticks on course
21.3.23 Market reaction to the Fed’s latest policy update has been well contained so far, with some relief that the Fed still projects three rate cuts this year, albeit sees less scope for lower rates further out, says Jason Wong , senior market strategist at BNZ Markets. The US Treasuries curve is steeper on the day, driven by lower rates at the short end. The NZD hit a fresh low for the year of 0.6025 last night but is closer to 0.6070 as we go to print. This morning the US FOMC published...
Yen in the limelight on currency markets
The yen was the main mover in currency markets overnight, falling more than 1% against the US dollar compared with pre-BOJ levels, notes BNZ Markets this morning. Comments by Bank of Japan Governor Ueda, who said it’s important to keep monetary conditions accommodative, weighted on the Yen, says Stuart Ritson, senior fixed interest strategist. The Bank of Japan (BOJ) has raised interest rates for the first time since 2007, becoming the last central bank to exit negative interest rate policy....
Currency markets looking becalmed
It has been a typically quiet start to the week, with investors keeping their powder dry ahead of a busy week, notes BNZ Markets this morning. “Currency markets barely have a pulse, with tiny net movements, while US rates have pushed up to flirt with fresh highs for the year,” says Jason Wong, senior market strategist. Policy meetings by the BoJ and Fed are the headline acts this week, with meetings from the RBA and BoE also thrown into the mix. Ahead of these key events, the market is off to...
