Financial Markets Wrap

An Overdue Recovery in NZD

- NZD performs strongly in May, up 2½% on a TWI basis
- Supported by high risk appetite and rising NZ export commodity prices
- Downside bias to bond rates

Commodity Currencies Soft in April

- The NZD continued its run of underperformance
- NZD TWI down 2% in April and 6% for the three months ending April
- Market-friendly French Presidential election outcome supports risk appetite and EUR

A Broad-Based NZD Sell-Off in March

- In March, the NZD was down 2-4% on all the major crosses we monitor…
- …not entirely justified when we consider fundamental forces
- Little change in global interest rates