Money Market

US dollar up on negative news-flow

A barrage of negative news including weaker data, an IMF economic downgrade and surging gas prices has seen US equities fall over 1% and the US dollar recover, notes BNZ Markets. Jason Wong, senior markets strategist says, “The EUR has underperformed, falling 1%, while the NZD shows a modest fall and NZD/AUD settling below 0.90. The US 10-year rate fell as much as 8bps overnight, but has since risen back to 2.79%, little changed from the NZ close. “The economic news flow remains dismal,...

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Kiwi slightly higher

It has been a quiet start to an eventful week ahead, with modest changes in European and US equity markets, notges BNZ Markets. US Treasury yields have pushed higher, reversing some of Friday’s large fall, says Jason SWong, senior markets strategist. The NZD has lagged gains for the AUD and CAD, while against higher US yields the yen has underperformed. The week ahead is stacked full of potential market-moving events including the US Fed’s policy meeting, US GDP and employment cost index data,...

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US dollar eases after big run

25.7.22 Friday saw big falls in global rates with recession fears returning to markets, notes BNZ Markets. The European composite PMI fell below 50, signalling negative growth in the region, while the US Services PMI dropped into contractionary territory as well, leading markets to aggressively pare back rate hike expectations, comments Nick Smyth. “Equities were lower on recession concerns, with tech stocks underperforming over concerns around online advertising spending.  The big mover in...

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Market focus on European events

22.7.22 It’s been another action-packed 24 hours in markets, notes BNZ Markets this morning. “The ECB hiked rates by a larger-than-expected 50bps, but the initial spike higher in the EUR and German rates has faded, both now little changed on the day,’ says Nick Smyth “Italian bonds have come under pressure from the political uncertainty in the country (new elections are set for September), with the ECB’s new anti-fragmentation tool getting a lukewarm reception. “The US 10-year rate has fallen...

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Italy crisis shadow over Euro

21.7.22 Italian politics have come back into the limelight overnight, with Draghi’s government on the verge of collapse after the major coalition parties withdrew their support. Italian bonds have sold off and the EUR has come under pressure but there haven’t been any major spill overs to broader markets. Indeed, US equities are higher on the day while the US 10-year rate has pushed up to 3.04%. The NZD is broadly unchanged over the past 24 hours, despite the fall in the EUR.  It’s a...

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Kiwi dollar breaks higher

20.7.22 Risk appetite is stronger overnight, with large gains in both European and US equity markets (S&P500 +2.5%), according to BNZ Markets. The EUR is almost 1% higher while European rates have increased after reports the ECB will consider a 50bps hike at this week’s meeting and announce its anti-fragmentation tool for supporting peripheral bond markets, says Nick Smyth. “The NZD has appreciated in sympathy with the EUR, breaking through the 0.62 mark overnight. “The EUR has continued...

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Kiwi spikes on CPI before settling

19.7.22 There hasn’t been a major theme to market movements overnight, with investors awaiting the big event risks in Europe later this week, says Nick Smyth at BNZ Markets this morning. “US equities are now slightly lower on the session, the US 10-year rate is slightly higher, while commodities have rebounded from their recent slump, helped by a weaker USD. “Ahead of these key upcoming European risk events, the EUR has rallied strongly, hitting a high of 1.02. “The NZD got an initial boost...

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US inflation rate centre stage

15.7.22 US equities are weaker after fully digesting the CPI shocker and not helped by weaker earnings from two major banks, says BNZ Markets. The US Treasuries curve has unwound some of yesterday’s flattening, after Fed Governor Waller backed a 75bps hike, with him needing to see stronger data before backing a larger 100bps hike, notes Jason Wong, senior markets strategist. “Italian political manoeuvres saw EUR dip further below parity before recovering. Both the NZD and AUD hit fresh...

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Strong rise in US inflation

14.7.22 It has been quite an eventful night, with a strong upside surprise to US CPI inflation and a surprise 100bps hike by the Bank of Canada, comments BNZ Markets this morning. “Despite some intraday volatility, most net market moves don’t look out of the ordinary, with flat US equities and modest changes in currencies,” said Jason Wong, senior markets strategist. “The USD and JPY are broadly weaker.  The EUR very briefly traded below parity before recovering. The NZD hit a fresh 2-year low...

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Markets waiting on key data

13.7.22 Markets are trading with a slightly cautious tone ahead of tonight’s key US CPI release, notes BNZ Markets. US equities are flat, US Treasury yields are little changed from the NZ close and the USD has reversed course after hitting a fresh 20-year high. EUR came within a whisker of parity before recovering, while the NZD has also recovered modestly after hitting 0.61 overnight,” says Jason Wong, senior markets strategist. Oil prices have fallen back below USD100 per barrel. Most of...

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