Bank of England hikes rates
24.3.23 US equities are higher after yesterday’s weak close. US short end rates are lower, while longer term rates are steadier. US dollar is broadly unchanged, while somewhat better risk appetite sees NZD outperform, notes BNZ Markets this morning. “The BoE hiked 25bps, taking its Bank Rate to 4.25%, and maintained guidance that further tightening is possible if inflation pressures warrant,” adds Doug Steel. The minutes noted ‘if there were to be evidence of more persistent pressures, then...
Dovish Fed and a weaker USD
Initial market reaction to the latest Fed policy update has been lower rates, modestly stronger equities and a weaker US dollar, notes BNZ Markets this morning.. “The Fed opted for a dovish 25bps hike, as widely anticipated, but ahead of the meeting there was some uncertainty about how the Fed would proceed in the face of recent turmoil in the banking sector,” says Jason Wong, senior markets strategist.. “So after much speculation about what the Fed would do today, it hiked by 25bps to...
Risk appetite improves; NZD eases
Equities and global rates are higher, encouraged by the moves of authorities to support the banking system, says BNZ Markets this morning. “There is now slightly more conviction that the Fed will deliver a 25bps hike in the next 24 hours.” Says Jason Wong, senior market strategist. The NZD, AUD and JPY have underperformed against the backdrop of higher global rates. “Risk appetite has improved as investors have become more comfortable that conditions in the banking sector have stabilised,...
Market less volatile but fresh questions arise
Market conditions have been volatile following the deal brokered over the weekend for UBS to buy Credit Suisse, notes BNZ Markets this morning. The US 2-year rate has traded a 40bps range. Both the 2 and 10-year rates are currently higher on the day. Equity markets are higher, recovering from earlier losses. The NZD’s move early yesterday above 0.63 proved short-lived and it has settled around 0.6250, underperforming for the day and down on all the key crosses, says Jason Wong, senior markets...
Market nerves are settling
17.3.23 Market sentiment has improved over the past 24 hours. Equity markets are up, bond yields generally higher and flatter, credit spreads tighter and the fear factor has eased somewhat, says BNZ Markets. “Some big moves continue in rates, not so much in currencies,” says Doug Steel. Oil prices have recovered some of yesterday’s losses. “Market nerves were soothed to some extent yesterday with the announcement that Credit Suisse would borrow as much as CHF50b (around US$54b) from the Swiss...
Silicon Valley Bank failure ripples
13.3.23 Warren Head The US Government has moved to settle financial uncertainty following the collapse of Silicon Valley Bank, the 16th largest bank in the US, and a specialist lender to tech start-ups. Employees of Silicon Valley Bank have been offered 45 days of work at higher pay rates at the successor organisation set up by the Federal Deposit Insurance Corporation (FDIC), which has taken control over the failed financial institution. There are 8.500 on the payroll. Silicon Valley Bank...
Kiwi dollar retraces on USD strength
3.3.23 Global rates have continued to push higher, not helped by strong Euro area inflation data and a revision that saw higher US unit labour cost inflation alongside still-low jobless claims figures, xsays BNZ Markets this morning Equity markets remain surprisingly resilient against the backdrop of higher rates, notes Jason Wong, senior markets strategist The USD has been broadly well-supported, seeing the NZD retrace back towards 0.62. In economic news overnight, US initial jobless claims...
Markets look settled ahead of US CPI
14.2.23 If there were any market nerves ahead of the release of tonight’s key US CPI report, it isn’t obvious by looking at overnight trading, says Jason Wong at BNZ Markets. “Perhaps a reflection of how the market traded through last week, when US equities fell and global rates skyrocketed. “Markets have settled, with the S&P500 currently up 1%, the Nasdaq up 1½% and modest changes in US Treasuries, albeit with a clear flattening bias – the 2 year rate up 2bps to a fresh 3-month high of...
Resistance for Kiwi, NZ rates rise
10.2.23 (7.28am) It’s been a slow news day, but US curve flattening pressure remains, seeing a new extreme of Treasuries 2s10s curve inversion, as investors converge to the Fed’s way of thinking. A weaker US dollar saw the NZ dollar trade just under 0.6390, but a reversal sees it back near 0.6340, says BNZ Markets. “It’s been a slow news day, but US curve flattening pressure remains, seeing a new extreme of Treasuries 2s10s curve inversion, as investors converge to the Fed’s way of thinking,”...
Kiwi dollar nudges upwards
Rates have oscillated, while currency movements have been well contained, says BNZ Markets this morning. US equities are generally lower as hawkish central bank speak continues. BNZ economist Doug Steel says there was not a lot of new news, “but central bank speakers continue to holler their hawkish messages. “The S&P500 is down around 0.9%, while the NASDAQ is off 1.3%. European bourses were generally stronger supported by slew of positive earnings updates. The Stoxx 600 closed up 0.3%....
Powell comments lift US market
US sharemarkets rose on Tuesday as investors digested comments from Federal Reserve Chair Jerome Powell about how long the fight to tame inflation may take. Powell said that he expects 2023 to be a year of "significant declines in inflation." Shares of Microsoft gained 4.2% after it unveiled new versions of its Bing internet search engine and Edge browser powered by ChatGPT maker OpenAI. At the close of trade, the Dow Jones index rose by 266 points or 0.8% after trading down 256 points earlier...
Fireside chat by Fed chair
The New Zealand dollar made up some lost ground overnight, says BNZ Markets this morning. BNZ Markets senior markets strategist Jason Wong says, “It was an uneventful trading session ahead of Fed chair Powell’s scheduled 6:40am fireside chat at the Economic Club of Washington, with bonds and equities flat in a consolidation mode.” The NZD headed from 0.63 to 0.6350 as Powell spoke and, while down against the strong AUD and JPY, it is higher on the other crosses, making up some lost ground late...
Big rebound in US dollar
Super-strong US payrolls and ISM services reports sent markets into a tailspin and there has been some follow-through overnight, driving weaker global equity markets, higher global rates and a big rebound in the USD, says BNZ Markets . The US 10-year rate is back up through 3.6% and the two-day sell-off will spill over into the domestic rates market today, from their multi-month lows recorded on Friday, says Jason Wong, senior markets strategist The NZD has fallen nearly 3% since Friday...
Weaker equities on FTSE
European sharemarkets closed mostly lower on Tuesday. The euro zone economy grew just 0.1% in the December quarter, notes CommSec. And German retail sales fell 5.3% in December. Healthcare fell 0.8% and both real estate and miners lost 1.2%. Banks rose 0.6%. “The continent-wide FTSEurofirst 300 index slid 0.2% but still posted the best January gain in eight years, up 6.6%.” The UK FTSE 100 index also lost 0.2% on Tuesday
US market advances strongly
US sharemarkets rose on Tuesday, with investors encouraged by data showing the smallest gain in labour costs in a year, notes CommSec. At the close of trade, the Dow Jones index was up by 369 points or 1.1 The S&P 500 index rose 1.5%. And the Nasdaq index lifted 191 points or 1.7%. In January the Dow rose by 2.8%; S&P 500 rose by 6.2%; and the Nasdaq gained 10.7% (biggest January gain for the Nasdaq since 2001). In response to earnings, shares in General Motors rose 8.4% and Exxon...
News flow holds market risks
31.1.23 US stocks are selling off in what will be a massive week of corporate earnings, a key Fed decision, and an employment report that should keep wage pressures alive, says Edward Moya, Senior Market Analyst, The Americas OANDA this morning. The January rally has hit a wall and probably won’t have a chance of returning until we get beyond Wednesday’s Fed press conference and Apple’s results after the Thursday close. Spain Treasury yields are rising after Spanish inflation unexpectedly...
Kiwi dollar range-bound
The 3.55% level for the US 10 year proved a step too far and brought out buyers, with the bond currently down 2bps for the day, notes BNZ Markets. Currency moves have been modest, with the NZD is tracking close to 0.65. US equities are slightly weaker after the big lift over the past couple of sessions. Jason Wong, senior markets strategist comments, “A glance of the WSJ’s front page website conveys a sense of stagflation – an article reporting that employers are shedding temporary workers at...
Euro reaches 9-month high
Newsflow has been light to start the new week but the move higher in equities and bond rates seen Friday night has been extended, BNZ Markets says this morning. “The S&P500 is currently up 1¼% adding to the near-2% gain on Friday, seeing the index trade back above the key 200-moving average, a level it has breached but failed to sustainably break above over recent months,” notes Jason Wong, senior markets strategist. “Investors are seemingly encouraged by the recent downdraft in inflation...
Tech stocks lead US rise
US sharemarkets rose on Friday, lifted by technology stocks, notes CommSec. Shares in Netflix rose 8.5% in response to earnings figures. Shares in Google parent Alphabet rose 5.3% after announcing 12,000 job cuts. But shares in Goldman Sachs fell 2.5% after the Wall Street Journal reported that the Federal Reserve was probing the company's consumer business. At the close of trade, the Dow Jones index was up by 331 points or 1.0%. The S&P 500 index lifted 1.9%. And the Nasdaq index gained...
Commodity currencies outperform
On Friday, risk appetite improved as the US stock market opened, driving strong gains in equities, higher global rates and a reversal in prior USD support. Commodity currencies outperformed, seeing the NZD close the week around 0.6470, notes Jason Wong, senior markets strategist at BNZ Markets. US equities finished last week on a stronger note for no obvious reason, other than recovering after three days of selling pressure, meaning that even after a 1.9% lift in the S&P500 on...
Bankers post div increase in turbulent times
19.1.23 9.00amNZT This past year has been one of the most turbulent in recent history, Simon Miller, the chairman of Bankers Investment Trust plc says in the annual results released in London last night. “Inflation has surged to levels not seen since the 1980s and the deteriorating economic outlook has resulted in sharp falls in both bond and equity prices. Stock picking has been challenging.” The company’s share price has reflected these uncertain markets, he notes. The NAV total return was...
US markets optimistic
US sharemarkets were higher on Tuesday, as investors bet the upcoming December Consumer Price Index (CPI) could show further deceleration. CommSec added that this could potentially giving the US central bank room to slow the pace of its interest rate hikes. “In corporate news, Microsoft (+0.8%) is in talks to invest as much as US$10 billion in OpenAI, the creator of artificial intelligence bot ChatGPT.” At the close of trade, the Dow Jones index rose 186 points or 0.6%. The S&P 500 index...
US market trudging lower
After having the best of years (pre-Covid) US sharemarkets are now experiencing a valuation drop that will see 2022 proclaimed as the worst year in fourteen. New York is getting back to some sort of normality after the ‘great blizzard’ and that seems to also mean a return to the usual self-doubts, grizzles and worries about what comes next? Well, more of the same. The news will keep blaming Covid, equipment shortages, the war in Ukraine, inflation and higher interest rates for the downwards...
Fedex EPS exceeds estimates
22.12.22 Fedex earnings exceeded expectations in the second quarter driven by the acceleration of aggressive cost reduction plans. FedEx (NYSE: FDX) reported adjusted diluted earnings per share of $3.18, coming in above consensus estimates of $2.77. However, revenue came in about $900 million light at $22.8 billion and below the $23.5 billion revenue level in its fiscal 2022 second quarter. Second quarter results were constrained by continued demand weakness, particularly at FedEx...
Nike’s second quarter buoys NYSE
22.12.22 NIKE, Inc. (NYSE:NKE) shares helped lift US stockmarket spirits today by reporting better than expected 2Q 2023 financial results to November 30, 2022. The global branded sportswear and footwear manufacturer posted second quarter reported revenues were $13.3 billion, up 17% compared to the prior year and up 27% on a currency-neutral basis* NIKE Direct sales were $5.4 billion, up 16% on a reported basis and up 25% on a currency-neutral basis NIKE Brand Digital sales increased 25% on a...
Deluge of hawkish updates
The net outcome of a deluge of central policy meetings and data has been “risk-off”, with hawkish updates from the Fed and ECB scaring equity investors and currency traders seeking the safe haven of the USD, says Jason Wong at BNZ Markets this morning. The NZD and AUD have been two of the weakest performers overnight, the latter down over 2%. GBP also underperformed following the message of a divided BoE MPC and lower UK rates going against the grain of a surge in euro area rates. NZ rates...
Kiwi consolidates – data stack deepens
Unsurprisingly, it has been a quiet overnight trading session as investors wait on the FOMC meeting, due at 8am this morning, comments Jason Wong at BNZ Markets. Ahead of the Fed, the US yield curve is steeper, the USD slightly weaker, and equities modestly higher. The NZD has consolidated around 0.6450 overnight. At yesterday’s HYEFU, the Treasury came around to forecasting a New Zealand recession next year while forecast bond issuance was lifted. Even after the FOMC meeting is out of the...
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...
Big week ahead for data and decisions
A stronger-than-expected US PPI release on Friday set the stage for a further rebound in global rates, with the US 10-year rate rising 10bps to 3.58%, notes BNZ Markets. US equity markets were lower amid the higher rates backdrop while currency moves were relatively subdued in comparison, adds Nick Smyth. “The NZD ended the week above the 0.64 mark. It’s a huge week ahead, including US CPI data and the Fed, ECB and BoE meetings, all with the potential to generate significant...
