Financial Markets Wrap: November Nirvana
• The market embraced a view that the tightening cycle was over for most major central banks
• This fuelled increased risk appetite, to its highest level in two years, alongside big falls in global interest rates
• The NZD outperformed, with a gain of 6% against the USD and gains on all the key crosses
Commodity currencies underperform in October
• The NZD fell 3% in October, the worst of the key majors, against a backdrop of underperforming commodity currencies
• Risk appetite was a drag for the NZD, with equity and bond markets showing negative returns for a third successive month
• The USD was broadly stronger, but after an early October peak showed no further gain despite positive economic releases
NZD ends September strongly, off a low base
• A late recovery saw the NZD as the best performing major currency in September against a backdrop of solid USD support
• A key theme was higher and steeper yield curves, seeing long rates at their highest level in over a decade
• The heavy influence of the PBoC prevented further yuan weakness, lending some support to the NZD