USD weaker, equities gain
US equities made modest gains on Friday in the absence of first-tier economic data or other market drivers, NOTES bnz mARKETS THIS MORNING The S&P ended up 0.1%, and consolidated above 4,500, having advanced close to 2% during the week. US investment grade credit spreads were little changed, and are close to the tightest levels for 2023, after the recent strong performance in risk sensitive assets. The US dollar was weak across the board and 10-year US treasuries were stable. News that...
Commodity currencies under-performing
A risk-off vibe has been overhanging the market, with commodity currencies underperforming over the past 24 hours, albeit with no fresh damage done to the NZD and AUD overnight, notes BNZ Markets this morning. US Treasury yields are lower, with the market supported by a series of weaker US economic indicators. On the calendar overnight were a series of second-tier US economic indicators but they have proven to be market moving, as they all conveyed the same message of a weaker US economy, says...
Kiwi dollar settles around o.60
Currency movements have been mainly modest overnight and the NZ Dollar has consolidated over the 0.60 mark. Following yesterday’s substantial decline, US Treasury yields have reversed course, seeing the 10-year rate up 11bps from the NZ close, notes BNZ Markets this moirning This followed data showing slightly stronger than expected retail sales but much weaker PPI inflation. “Higher rates haven’t got in the way of further upside in US equities, “The expert commentary around yesterday’s...
Sizeable USD drop after US CPI
There were large moves across global markets as US CPI printed below consensus expectations, notes BNZ Markets. “The data increased the likelihood that the US Federal Reserve hiking cycle is complete and the next move in the policy rate will be a cut in 2024,” comments Stuart Ritson, senior interest rate strategist. “Equities made strong gains – the S&P is up 1.8% in early afternoon trade – while bond yields fell sharply and the US dollar lost ground. US CPI was unchanged in October...
Markets waiting for US CPI
14.11.22 Market movements have been modest ahead of tonight’s key CPI release, with little net change in US equities and Treasury yields and modest changes in currencies, notes BNZ Markets this morning. Jason Wong, senior markets strategist comments, “The AUD has outperformed, seeing NZD/AUD push lower as the NZD remains flat just under 0.59. It has been a typically quiet start to the week, particularly so with the key release this week being the US CPI report due tonight. The US 10-year rate...
Kiwi dollar outperforms
10.11.23 Another day of light news sees further market consolidation, notes BNZ Markets this morning. “The NZD has outperformed, pushing up towards 0.5950 and it is higher on the crosses,” says Jason Wong, senior markets strategist. The US 10-year rate has pushed higher after trading at a fresh six-week low yesterday afternoon. “This week is living up to its billing of being uneventful, as the lack of newsflow continues. Traders are anticipating what Powell might say when he appears on a panel...
Oil prices on backburner
Newsflow remains light with modest changes in pricing across equities, bonds and currencies, as the market shows signs of consolidation following last week’s significant moves, says BNZ Markets this morning. The key market mover has been lower oil prices, with Brent crude down 2½% for the day after yesterday’s 4.2% drop, seeing it trade below USD80 per barrel for the first time since July.,” notes Jason Wong., senior markets strategist. “When prices were above USD90 the narrative was very...
Greenback in broad-based gains
8.11.23 The US Dollar has made broad-based gains while global bonds are lower in yield, says BNZ Markets this morning In commodity markets, oil prices have fallen close to 3%, to the lowest level in more than 3 months, on concerns about global growth following weak Chinese trade data, notes Stuart Ritson, senior fixed interest strategist. “Comments by US Federal Reserve officials emphasised that bringing inflation lower to 2% is its primary goal. However, Chicago Fed President Austan Goolsbee...
Anzac currencies slip back
It has been a quiet start to what looks to be a quiet week ahead, notes BNZ Markets. Currency movements have been modest, with the NZD and AUD slipping after last week’s strong gains. Equity markets have consolidated while US Treasury yields has pushed higher after last week’s large fall. “Following last week’s monumental movements in financial markets across all asset classes, the new week has begun on a tepid note,” says Jason Wong, senior markets strategist. “This week’s calendar is light...
Kiwi dollar tips US$0.60
6.11.23 There were some outsized moves in currency markets with the US dollar under pressure after the release of US payrolls data, notes BNZ Markets. The services ISM contributed to a further leg lower with the dollar index falling close to 1%. EUR/USD traded to highs just below 1.0750, 2 big figures above the weekly lows, says Stuart Ritson, senior fixed interest strategist.. The Canadian dollar, while gaining against the US dollar, was weak on the cross rates while the defensive pairings,...
US dollar weakness after Fed no change
Risk sensitive assets have traded strongly in the aftermath of the FOMC as investors gain confidence that the aggressive monetary tightening cycle is coming to an end, says BNZ Markets this morning. The S&P is up more than 1.5% and is on track for the largest one-day gain since May. Equity indices in Europe and Asia also posted strong gains. Longer dated treasury yields extended lower and the dollar index fell but recovered off the lows. The market now looks ahead to key US labour market...
Weaker Japanese yen key mover
1.11.23 It has been a mostly uneventful end to the month, despite the heavy event calendar, says BNZ Markets this morning. “The key market move has been a weaker JPY, even in the face of a further watering down of its yield curve control policy,” comments Jason Wong, senior markets strategist. “There was a change in direction in US Treasuries and the USD after the US employment cost index came in slightly stronger than expected, although month-end flows could well have been a contributing...
Some optimism in the markets
Risk appetite has begun the week on a positive note, with the market taking a sanguine view of developments in the Middle East says BNZ Markets this morning “Equity markets are higher, oil prices are down 3% and the USD is broadly weaker,” says Jason Wong, senior markets strategist. US Treasury yields have pushed higher, with nerves ahead of the Treasury’s refunding announcement and a Nikkei report that the BoJ will discuss a further tweak of its yield curve control policy. “Israel began its...
Rising risk aversion for markets
30.10.23 Global equities ended the week on a soft note with geopolitical risks and an underwhelming corporate earnings season undermining market sentiment, says BNZ Markets this morning. “The S&P closed 0.5% lower taking weekly losses to more than 2%. The market has now entered a ‘correction’ having declined more than 10% from the peak near 4600 in July. “Oil and gold prices increased with gold trading above $2,000 an ounce for the first time since May. US treasuries gained with the...
US GDP expansion
Investor risk sentiment remains fragile with global equities extending recent losses amid disappointing earnings from large US tech companies, notes BNZ Markets this morning The S&P is down more than 1%, falling further below the 4,200 level which formed the topside of the range through the first half of the year, says Stuart Ritson, senior interest rate strategist. Major equity benchmarks also declined in Europe and Asia. US treasury yields are lower, and the dollar index is little...
US yields and dollar higher
26.10.23 US equities traded lower with the S&P down close to 1.5% in afternoon trade as US treasury yields moved sharply higher, notes BNZ Markets this morning The move in treasuries contributed to a stronger US dollar. European stocks ended little changed while initial gains by Asian equities, after China announced new debt issuance and a higher budget deficit, faded, says Stuart Ritson. The Hang Seng China Enterprises Index was up more than 3% intraday before closing 1% higher. The...
Market awaits Aussie CPI
The key market movement overnight has been broad USD strength, seemingly kicked off after some weak European PMI data, says BNZ Markets this morning. “But it might also just be a case of an unwind of the previous day’s move,” suggests Jason Wong, senior markets strategist. NZD/AUD has gone sub-0.92, ahead of key Australian CPI data today. The US 10-year rate has sustained the move lower seen in the previous session. “Euro area PMIs edged lower and were weaker than expected, the composite index...
Commodity currencies under performing
20.10.23 Against a backdrop of weaker risk appetite, commodity currencies have underperformed over the past 24 hours, with the NZD trading at a fresh low for the year before recovering, notes BNZ Markets this morning. “Trading has been whippy over the past hour or two in response to a speech by Fed Chair Powell, with a fickle market responding to both dovish and hawkish soundbites,” says Jason Wong, senior markets strategist at BNZ Markets. The US 10-year rate traded at a fresh 16-year high of...
US dollar gains strength
19.10.23 Global bonds markets remain under pressure with US treasuries making fresh multi-year highs ahead of a widely anticipated speech by US Fed chair Jerome Powell, notes BNZ Markets this morning. The rise in yields contributed to a pullback in equities – the S&P was down 0.7% in early afternoon trade – and a higher US dollar, says Stuart Ritson, senior interest rate strategist. NZD/USD made fresh 2023 lows below 0.5860. “Brent crude futures prices increased more than 3% on concerns...
Rush of financial events
There has been plenty of news to digest. The NZD and AUD are at opposite ends of the leaderboard for the day after a weaker than expected NZ CPI print and more hawkish than expected RBA meeting minutes, seeing narrower NZ-Australia rate spreads and NZD/AUD down nearly a cent, says Jason Wong, senior markets strategist at BNZ Markets. Much stronger than expected US retail sales drove higher Treasury yields, but the blip up in the USD was short-lived, speaking to long USD positioning. There was...
NZ and Aussie dollars firmer
Newsflow has been light to start the week but the market has adopted a “risk-on” tone, noted BNZ Markets this morning. Of the key majors, the NZD and AUD have performed the best, following their underperformance last week, both up 0.7% from last week’s close. This sees the NZD at 0.5925 and the AUD at 0.6340, with the NZD/AUD cross flat at 0.9350. Jason Wong, senior market strategist says “The NZD opened the week with a kneejerk lift higher after Saturday’s election result – NZD/AUD getting...
Shift into safe haven assets
Rising investor risk aversion impacted global markets into the end of last week; global equities fell and flows into safe haven assets picked up, notes BNZ Markets this morning. In commodity markets, both oil and gold surged higher. Brent crude prices increased above $90 a barrel, a daily gain of more than 5%. US consumer sentiment fell to the lowest level since May reflecting higher gas prices and lower equities. Long term inflation expectations picked up relative to September but remain...
Strong US CPI lifts US rates and USD
The market focus was on the US CPI report overnight and a strong underbelly of inflation played to the higher for longer rates narrative, driving US rates and the USD much higher, noytes BNZ Markets this morning. The NZD and AUD performed poorly overnight, with the NZD languishing back down at 0.5930, says Jason Wong, senior markets strategist The US CPI rose 0.4% m/m and 3.7% y/y in September, one-tenth higher than expected, while the more important CPI ex food and energy measure was in line...
Kiwi dollar stable
Global markets were generally subdued overnight with investors looking ahead to key US CPI data this evening and the release of the minutes from the September FOMC meeting where the US Federal Reserve held rates steady at a 22-year high of 5.5%, notes BNZ Markets this morning. The FOMC minutes revealed policy makers agreed that the central bank should ‘proceed carefully’ on rate decisions and that incoming data would help determine if another rate hike was required in coming months, says...
Market calmly weighing geopolitical risk
The market is currently taking a sanguine view of the war underway between Israel and Hamas, with oil trading sideways, sustaining the near-4% gain yesterday, equities gaining ground and no evidence of a safe-haven bid in currencies, notes BNZ Markets this morning. “Dominating the market’s focus is the seemingly coordinated message from Fed officials that the recent tightening in financial conditions is doing some of the work to support a weaker inflation trajectory, and is something the Fed...
Markets gripped by Israel conflict
10.10.23 Conflict between Israel and Hamas that escalated over the weekend gripped the market’s attention as the new week kicked off, notes BNZ Markets. Weaker risk appetite initially enveloped markets, with asset prices initially moving in their typical direction after such a major geopolitical event – global equities weaker, oil prices higher, and bond markets receiving a safe-haven bid alongside the USD, says Jason Wong, senior markets strategist at BNZ Markets. “But not all moves have been...
US dollar up sharply
9.10.23 US nonfarm payrolls easily beat expectations at the end of last week resulting in significant moves across asset markets including a higher US dollar, notes BNZ Markets this morning In currency markets, the US Dollar jumped sharply following the upside surprise in payrolls but faded in line with the retracement in treasury yields, says Stuart Ritson. The dollar index traded 0.6% higher initially but ended the session around 0.2% lower than before the data. In the majors,...
NZ dollar marginally higher
6.10.23 In currency markets overnight, the US dollar was marginally weaker, notes BNZ Markets this morning. “EUR/USD oscillated in a narrow range around 1.0520 while USD/JPY retested the Asian session lows near 148.40,” says Stuart Ritson. “USD/JPY dropped sharply yesterday afternoon with the market still on edge following the ‘flash crash’ earlier in the week where USD/JPY fell close to 2% in a matter of seconds. After a temporary dip, NZD/USD is marginally higher overnight. NZD/AUD...
USD eases on weaker jobs news
US Treasury yields pulled back from 16-year highs reached in early European trade in a move supported by softer than expected US labour market data, says BNZ Markets this morning The retracement provided some respite for investor risk sentiment which was under pressure from the relentless move higher in real yields in recent days, notes Stuart Ritson, senior interest rate strategist. . US equities recovered off the lows and the US Dollar weakened. Oil fell to the lowest level since early...
NZ dollar softens ahead of RB review
It’s a daily case of wash, rinse, repeat, with higher rates, steeper curves, a stronger USD and weaker equity markets, with a strong US JOLTS report adding to the damage, says BNZ Markets this morning. US job openings unexpectedly rose sharply by 690k in August to 9.6m, breaking a run of declines (having fallen for six of the previous seven months), says Jason Wong, senior market strategist. “The rebound in job openings pointed to some lingering resilience in the US labour market, not...
