Markets Today

BNZ Markets Today

Jason Wong -

After yesterday’s 4% plunge in the S&P500, investors remain cautious. Growth fears for the US economy have resulted in notable weakness in the USD while US rates have pushed lower, led by the short-end of the curve, as traders pare bare monetary policy tightening expectations a little. The NZD has traded back up to 0.64.

BNZ Markets Today

Jason Wong -

US equities have plunged as some poor earnings results from the retailers provide a reality check on how damaging a high inflationary environment can be. Bonds have found a safe-haven bid and so have JPY, CHF. The USD has also been well supported. The NZD has fallen back down towards 0.63, but GBP has been the worst performing following another strong inflation report.

BNZ Markets Today

Jason Wong -

Risk appetite has recovered as investors eye up easing lockdown restriction in China and some stronger economic data have supported the positive mood. Central bank speak has remained hawkish, but not enough to prevent equity markets from rallying. Global rates are much higher and European currencies have been the best performing.

BNZ Markets Today

Jason Wong -

Some poor China economic data set the scene for a risk-off vibe to start the new week, with weaker US equity markets, lower global rates and the NZD weakening towards 0.62 before a significant turnaround overnight ensued. The US S&P500 now shows a modest gain and the NZD has recovered strongly to break up through 0.63.

BNZ Markets Today

Nick Smyth -

Risk assets ended last week on a positive note, with equities rebounding strongly on Friday from their heavy falls earlier in the week. News that Shanghai was planning to start removing restrictions this week was taken positively by the market although the rebound was likely as much to do with a correction from oversold levels as a change in investors’ economic outlook. Global rates and commodity currencies rebounded as well, with the NZD ending the week back at around 0.6785. Friday saw large falls in NZ wholesale rates, with the market trimming expectations of RBNZ OCR hikes over the next year.

BNZ Markets Today

Nick Smyth -

Markets remain firmly in risk-off mode as concerns grow that the global economy is heading towards a recession. The unfolding energy crisis in Europe, concerns that Beijing could be plunged into lockdown at any point, and expectations of aggressive rate hikes from central banks are all weighing on sentiment. Equity markets continue to tumble, with the S&P500 down another 1.8% overnight, to now be on cusp of a bear market, while industrial commodity prices and global rates have fallen sharply on global growth fears. The EUR has plunged more than 1%, to near its lowest level since 2003, amidst the escalating energy crisis in Europe while the NZD and AUD have both tumbled to fresh lows. Yesterday saw the market pare back OCR rate hike expectations after the RBNZ’s inflation expectations series didn’t increase by as much as feared.

BNZ Markets Today

Jason Wong -

Risk sentiment soured after the US CPI report showed stronger than expected inflationary pressure, driving the S&P500 down to a fresh low. The US yield curve has flattened, with higher short rates and lower long-term rates. The yen has been well supported against the backdrop of a lower US 10-year rate, while GBP is weaker as Brexit headlines return to the front pages. The NZD has traded a full 1-cent range in the aftermath of the US CPI report and is currently hovering near 0.63.

BNZ Markets Today

Nick Smyth -

There has been something of a turnaround in risk sentiment overnight, with equities bouncing back from their recent heavy falls. Long-term global rates have fallen amidst lower market-implied inflation expectations, with US 10-year rate back below the 3% mark and the German 10-year rate below 1%. The improvement in risk sentiment hasn’t done much to help the NZD however, which has hit a fresh year-to-date low below 63 cents.

BNZ Markets Today

Nick Smyth -

Global equities and industrial commodities continue to tumble on rising global growth concerns, with heavy losses seen across all the major equity indices overnight. The CNY has continued its recent sharp downtrend while the NZD and AUD have fallen more than 1%, with both hitting fresh lows for the year. US Treasury rates have fallen back amidst the risk-off backdrop, although the 10-year rate continues to trade above 3%.

BNZ Markets Today

Nick Smyth -

US and German 10-year rates surged to fresh cycle highs on Friday amidst continued hawkish rhetoric from the Fed and ECB. The nonfarm payrolls report suggested the pace of US wage growth may be easing although this is highly unlikely to prevent another 50bps Fed rate hike next month. Meanwhile, equities, base metals and commodity currencies remain under downward pressure on growing concerns around the global growth outlook, the NZD ending the week just above the 0.64 mark. Russia marks Victory Day tonight amidst speculation Putin could use the occasion to formally declare war on Ukraine.

BNZ Markets Today

Nick Smyth -

The post-FOMC rally in risk assets and bonds didn’t even last 24 hours, with markets seeing a massive reversal overnight as stagflationary fears dominate. The US 10-year rate has made a new cycle high of 3.11% and is currently 12bps higher on the day, while the USD has hit a fresh 20-year high. Equities have crumbled as rates have taken off, with the NASDAQ currently down over 5% and the S&P500 more than 4% lower. The NZD and AUD are down by more than 2% amidst a broad-based risk-off move, the NZD currently trading just above 0.64. The GBP is another key underperformer overnight, down by 2.2%, after the BoE painted a grim picture of the UK economic outlook and sounded cautious about the need for future policy tightening.

BNZ Markets Today

Jason Wong -

There was no surprise in the Fed’s 50bps hike, plans for further hikes, or plans for quantitative tightening but the market has reacted to Chair Powell’s comment that seemed to rule out hike steps of 75bps. The US yield curve has steepened on that, with a large fall in the 2-year rate, while the 10-year rate is down 6bps to 2.91%. The USD has broadly weakened, seeing the NZD back up through 0.65. AUD outperformance has seen NZD/AUD almost break below 0.90.

BNZ Markets Today

Jason Wong -

US equity markets remain choppy and currently show a modest gain, following a strong late rally yesterday. The US 10-year rate has pushed slightly lower after returning to the 3% mark. The AUD has been the best major since this time yesterday, although the net gain came ahead of a hawkish policy update alongside the RBA’s first rate hike this cycle. The NZD hit a fresh near 2-year low last night, but now shows a small gain from his time yesterday, while the RBA’s move sent NZD/AUD lower. The GDT auction was very weak.

BNZ Markets Today

Jason Wong -

By recent standards it has been a quiet trading session with little news, with the UK and some key Asian markets on holiday. But the new month has begun with the same trends as we saw through April – weaker equities, higher rates and a stronger USD. The NZD has traded at a fresh near 2-year low. The US 10-year Treasury rate cracked the 3% mark for the first time this cycle.

BNZ Markets Today

Nick Smyth -

Global rates moved sharply higher again on Friday, following upside surprises to US wage data and European core inflation. The Fed is almost universally expected to raise its cash rate by 50bps this week, but the market has moved to price an almost 50% chance of a 75bps hike (!) in June. The prospect of aggressive central bank tightening and underwhelming earnings outlooks from Amazon and Apple saw the S&P500 and NASDAQ plunge by around 4%, capping off a dreadful month for risk assets. The NZD and AUD were weaker on Friday amidst weaker risk appetite, the NZD ending just above 0.6450, a more than 7% fall on the month.

BNZ Markets Today

Nick Smyth -

The main story over the past 24 hours has been the sharp weakening in the JPY, with USD/JPY blowing through 130 overnight after the BoJ stood firm on its commitment to cap Japanese rates under its Yield Curve Control policy.

BNZ Markets Today

Nick Smyth -

There has been some recovery in risk appetite overnight, with equities rebounding from yesterday’s heavy falls and the US 10-year rate bouncing back to 2.82%. However, the USD remains firmly on the front foot, with the DXY index briefly surpassing its early-2020 highs and hitting its highest level in five years. USD strength partly reflects weakness in the EUR, which remains under pressure amidst an intensifying energy crisis on the continent, as Russia cuts off gas supplies to Poland and Bulgaria. The NZD printed a year-to-date low overnight, although, like the AUD, it has held up relatively well amidst some signs of stability in the CNH. The AUD was also supported by a big upside surprise to Australian CPI, cementing expectations the RBA will kick off its tightening cycle next week. NZ short-term rates continue to relentless push higher.

BNZ Markets Today

Nick Smyth -

It’s been another ‘risk-off’ session across markets overnight on growing concerns around the global growth outlook. Equities and bond yields have fallen sharply while the USD and JPY have appreciated. The NZD has dropped below 0.66 amidst broad-based USD strength and mounting risk aversion

BNZ Markets Today

Jason Wong -

It has been an ostensibly risk-off environment since we left for the long weekend, with a chunky fall in global equity markets and the VIX index piercing 30. Fears of how a front-loaded Fed tightening cycle might play out and China’s zero-COVID strategy resulting in further lockdowns and likely supply chain issues have been in focus. The combination of a risk-off move and significant downward pressure on the yuan saw the NZD break below 0.66 and it is currently just above that mark, down 1.2% from Friday’s NZ close. With USD strength pervasive, most other majors have been as weak, if not weaker. Bonds have been a beneficiary of the selling pressure in equities, with the US 10-year rate down to 2.81%, some 14bps below the level at the NZ close on Friday.

BNZ Markets Today

Jason Wong -

There has been plenty of central bank-speak since the NZ close and more hawkish commentary out of Europe has seen a front end-led sell-off in global bond markets. European 10-year rates are up 7-10bps, with 2-year rates up near 15bps. The US 10-year rate revisited 2.95% and is currently up 8bps for the day to 2.92%. Weaker risk appetite has seen commodity currencies underperform, with the NZD and AUD down in the order of 0.9% overnight. Selling pressure in JPY looks to have been exhausted, managing to hold its ground despite the big lift in global rates.

BNZ Markets Today

Nick Smyth -

The past 24 hours have seen a reversal of recent market trends, with global rates falling sharply and the USD broadly weaker. The US 10-year rate, which made a charge for 3% yesterday afternoon, is back to around 2.85%. USD/JPY is back below 128 while the NZD is up around 1% to 0.68. While most equity markets are higher overnight, the NASDAQ is lower, weighed down by a 35% fall in Netflix. NZ CPI takes centre stage this morning, with annual headline inflation expected to reach around 7%. Fed Chair Powell is speaking tonight.

BNZ Markets Today

Nick Smyth -

Global rates continue their relentless trend higher. The US 10-year rate is closing in on 3% while the 10-year real yield approaching 0%. As US rates march higher, USD/JPY continues to explode to the upside, with the currency pair hitting a fresh 20-year high of around 128.90 overnight. Movements in other currencies have been more restrained and the NZD has consolidated above 0.6720 overnight. Meanwhile, US equity markets have rebounded from their falls over the long weekend as earnings season kicks into gear.

BNZ Markets Today

Nick Smyth -

The great global bond sell-off has resumed over the long weekend, with the US 10-year rate hitting a fresh cycle high of 2.88%. NY Fed President Williams has cemented expectations for a 50bps hike next month by saying such a move was “a very reasonable option ” while oil prices have increased sharply on supply concerns, adding to inflationary concerns and boosting bond yields. The USD is broadly stronger against a backdrop of higher Fed rate hike expectations and softer risk appetite. USD/JPY has reached a new 20-year high, the EUR has fallen to a two-year low after the ECB failed to live up to elevated market expectations and the NZD has fallen back towards 0.67, its lowest level in eight weeks. An interview with RBNZ Governor Orr is released at 8am this morning.

BNZ Markets Today

Nick Smyth -

Global rates have shown further signs of stabilising overnight on hopes that inflation may be close to peaking. The US 10-year Treasury rate has fallen to around 2.68%, helping to boost equity markets and driving a fall in the USD. Both the RBNZ and Bank of Canada have delivered 50bps rate hikes over the past 24 hours. Despite the 50bps hike, the RBNZ’s statement was seen as ‘dovish’ relative to very elevated market expectations and NZ rates and the NZD have fallen sharply, with the NZD/AUD cross hitting its lowest level in 18 months.

BNZ Markets Today

Nick Smyth -

It’s been another volatile trading session overnight. US rates have fallen sharply after US core CPI surprised to the downside. The US 10-year rate is back to 2.72%, having traded as high as 2.83% yesterday afternoon. After opening higher, US equities are now lower on the day, despite speculation China could start easing lockdown restrictions. The NZD and AUD are stronger on the back of higher commodity prices. The RBNZ MPR takes place today with the market pricing around an 80% chance of a 50bps OCR hike.

BNZ Markets Today

Jason Wong -

Risk appetite is weaker as investors focus on increasing lockdowns in China and the relentless rise in longer term bond rates. Global equities are weaker and global 10-year rates have risen to fresh multi-year highs. Oil prices have fallen back below USD100 on weaker demand fears from China lockdowns, amid ongoing supply from Russia. Against that backdrop, commodity currencies and JPY have underperformed.

BNZ Markets Today

Jason Wong -

Newsflow was light on Friday but the great global bond market selloff continued, with the US 10-year rate reaching a fresh three-year high of 2.73%. The USD reached its highest level in nearly two years before ending the day flat. Against a backdrop of slightly weaker risk appetite, the NZD was the worst performer on Friday, down 0.6% for the day to just under 0.6850. The week ahead is a busy one, with policy updates from the RBNZ, Bank of Canada and ECB, as well as US CPI data.

BNZ Markets Today

Nick Smyth -

After a modest pullback yesterday, global bond yields have resumed their upwards trend. The US 10-year yield is back near three-year highs at 2.66% amidst further curve steepening. Elsewhere, US equities have rebounded while the USD continues to edge closer to its recent highs. The NZD is hovering just below 0.69 this morning.

BNZ Markets Today

Nick Smyth -

Global rates continue to head higher, with the US 10-year rate printing a fresh 3-year high overnight of 2.66%, although it has since drifted a little lower. Risk appetite remains cautious amidst the prospect of aggressive central bank tightening and with Shanghai in lockdown. Equity markets and oil prices are lower overnight while the NZD and AUD have both fallen. Yesterday saw a brutal move higher in domestic rates in illiquid trading conditions, as the global bond sell-off spilled over to New Zealand. The FOMC minutes released a short while ago flagged the prospect of 50bps hike(s) and relatively aggressive quantitative tightening by the Fed.

BNZ Markets Today

Jason Wong -

Global rates are significantly higher, driven by a number of factors including the hawkish pivot from the RBA, hawkish comments from the Fed’s Brainard, French political risk and the end of the ECB’s pandemic bond buying programme The US 10-year rate has hit a fresh high for the cycle just shy of 2.57%. Higher global rates have driven the yen weaker, while EUR is weak as the EU mulls fresh sanctions. The AUD has been the strongest performer over the past 24 hours, while the NZD is flat, after briefly breaking through 0.70.

BNZ Markets Today

Jason Wong -

Newsflow has been light to kick off the new week but risk sentiment continues to improve, with equity markets higher, led by the technology sector, and commodity currencies outperforming. The US 10-year rate is slightly higher, against a backdrop of lower European yields, seeing the euro underperform.

BNZ Markets Today

Jason Wong -

Another strong US employment report drove US short end rates higher on Friday, resulting in further curve flattening, seeing the 2s10s curve closing inverted for the first time this cycle. US equities remained unperturbed and closed modestly higher. Currency movements were modest Friday night, with the NZD ending the week around 0.6925.

BNZ Markets Today

Jason Wong -

It has been a fairly uneventful end to a historic trading quarter, with a slight risk-off feel. Equity markets have been on the soft side, while global rates are lower. Oil prices are lower after the US decision to release an unprecedented 180m barrels from its strategic reserve. Safe haven currencies have outperformed and the euro is also on the weak side. The NZD has pushed down to 0.6940.

BNZ Markets Today

Nick Smyth -

There has been some consolidation in US bond yields and equities overnight, after their recent surge higher. In Europe, German inflation hit its highest level since at least the early 1990s, sending the German 2-year rate back into positive territory for the first time in almost eight years. The USD is broadly weaker over the past 24 hours, with the NZD pushing up to just below 0.70. Domestic rates were volatile again yesterday with curve flattening the key trend.

BNZ Markets Today

Jason Wong -

Positive mood music on Russia-Ukraine peace talks drove a strong overnight rebound in European equities, rates and the euro, and a fall in oil prices. US 2-year rates are higher, but the 10-year rate is lower, with the curve briefly inverting. Japan’s stepping up of rhetoric on the oversold yen has helped a little and it has outperformed. Other currency movements have been modest overnight, and the NZD has consolidated just above 0.69.

BNZ Markets Today

Jason Wong -

It has been a volatile start to the new week, with wide ranges in bond markets, currencies and oil prices. The US 10-year rate is down slightly after a temporary surge to a new cycle-high, while curve flattening is evident. JPY has been whippy and overall weak, as has the NZD, which traded below 0.69 this morning. AUD weakness has been more modest and NZD/AUD has closed in on 0.92.

BNZ Markets Today

Nick Smyth -

The global bond sell-off picked up pace on Friday with the market ramping up expectations of Fed tightening after Citi called for consecutive 50bps hikes at the next four meetings. The US 10-year hit 2.50% for the first time since mid-2019. Equities remain surprisingly resilient to the carnage in the bond market, with the S&P500 managing to post a modest gain on Friday. Likewise, currency moves were limited on Friday, USD/JPY consolidating around the 122 level and NZD hovering under 0.70.

BNZ Markets Today

Nick Smyth -

Good Morning

Market sentiment remains surprisingly upbeat given the ongoing war in Ukraine and central banks’ push towards tighter monetary policy. The S&P500 is up around 1% overnight and the NASDAQ 1.3%, with both indices now trading well above the levels prior to Putin’s invasion of Ukraine. The US 10-year rate has shown some tentative signs of consolidation overnight after its recent surge higher while the German 10-year rate reached a new multi-year high. The JPY remains under pressure, with USD/JPY hitting a fresh 6-year high. Movements in other currencies have been more modest, although the NZD has underperformed, and the NZD/AUD cross has fallen to its lowest level since last June.

BNZ Markets Today

Jason Wong -

Global equity markets have pulled back overnight and global bond rates are also lower after their recent surge higher. Commodities prices are stronger, and this has supported the AUD, more so than the NZD. GBP weakened despite another strong inflation report, while EUR was also on the soft side.

BNZ Markets Today

Jason Wong -

Risk appetite is higher, as the market continues to digest the Fed’s hawkish update latest week and Chair Powell’s hawkish speech yesterday. Global rates continue to push higher and equity investors seem to have no fear of that, buying into Powell’s soft-landing scenario. The NZD and AUD have outperformed overnight and JPY is the weakest of the majors

BNZ Markets Today

Jason Wong -

The new week has begun with global bond markets under significant pressure, seeing rates surge to fresh multi-year highs, with more hawkish comments by Fed Chair Powell adding to upward momentum in yields. Under the circumstances, a modest fall in the S&P500 doesn’t look that bad. Currency markets only show modest movements, with the NZD hovering below the 0.69 mark.

BNZ Markets Today

Nick Smyth -

In case investors didn’t get the memo from the FOMC meeting on Thursday morning, there was a flurry of hawkish Fed speak on Friday, leading to a further lift in short-term US rates, a flattening in the yield curve and a (relatively modest) boost to the USD. It didn’t do much to dent resurgent risk appetite though, with US equities extending their gains from earlier in the week. The NZD closed above 0.69 for the first time since November amidst broader strength in commodity currencies. Over the weekend, there have been reports that Russia and Ukraine “have almost reached agreement” on parts of a peace deal, which should see a risk-on tone to start the week.

BNZ Markets Today

Nick Smyth -

Despite the Fed striking a hawkish tone at yesterday’s FOMC meeting, risk appetite has continued to recover. US equities have extended their post-FOMC rally overnight while the USD is broadly weaker, seeing the NZD has push up towards 0.69. Bond yields are little changed. Oil prices have jumped overnight after Russia pushed back against suggestions of progress in peace talks. Domestically, the market pared OCR rate hike expectations after a slightly softer GDP release, with the probability of a 50bps hike in April now sitting just below 50%.

BNZ Markets Today

Jason Wong -

Risk appetite increased after the Chinese government showed its support for the economy and stockmarket and some positive mood music around peace in Ukraine. Global equities showed strong gains and global bond rates were broadly higher, ahead of the Fed’s policy update. A hawkish statement and a ramping up of rate hike projections saw US equities pare gains, while the US Treasury curve bear flattened. The NZD and AUD pared overnight gains after the Fed statement.

BNZ Markets Today

Jason Wong -

A further plunge in oil prices has helped support a recovery in US equities. Anxiety in the bond market has settled for a day, with small changes in US Treasuries and European rates pushing lower. Currency movements have been modest, with the NZD showing a small gain overnight to 0.6760, recovering the small loss seen during local trading hours.

BNZ Markets Today

Jason Wong -

Markets remain volatile but as the new week has begun, movements in oil, bonds and currency markets have been more interesting than equities. The latest serving of volatility has seen a chunky fall in oil prices and another surge in global bond yields. Hopes of a Russia-Ukraine peace deal have been a factor, as well as a focus on China. European currencies have outperformed, while JPY and the AUD have been the hardest hit.

BNZ Markets Today

Nick Smyth -

Investor sentiment remains fragile amidst the fallout from the war in Ukraine and the prospect of major central bank tightening this year. US equities fell further on Friday while the US 10-year rate hovered around the 2% mark. The USD was broadly stronger, with USD/JPY hitting a five-year high and the NZD slipping back towards 0.68. The US 10-year breakeven inflation rate surged to a record high, just below 3%. Besides ongoing developments in the Russia-Ukraine war, the focus this week is the FOMC meeting at which the Fed is expected to kick off its tightening cycle with a 25bps rate hike.

BNZ Markets Today

Nick Smyth -

Global rates are higher overnight after the ECB set out an accelerated tapering schedule and opened the door to earlier rate hikes, despite the ongoing war in Ukraine. European rates have seen big moves higher, especially in the periphery, while the US 10-year rate has punched through 2%. Equity markets are weaker, by 1-2% in the US and 3-4% in Europe, amidst the prospect of monetary policy tightening and no breakthrough in Russia-Ukraine talks. The EUR has fallen overnight, despite the hawkish surprise from the ECB, while commodity currencies are stronger, the NZD trading up towards 0.6865. Yesterday saw new cycle highs in NZ 10-year rates and those moves should extend this morning given overnight moves.

BNZ Markets Today

Jason Wong -

Market volatility continues, with a reversal of recent trends despite no obvious trigger. Global equities have rebounded strongly, commodity prices show widespread falls, global rates are significantly higher and European currencies (ex CHF) are the strongest performers by far. Amidst improved risk appetite, safe-haven currencies are weaker, seeing the NZD recover to 0.6850 and the AUD up to 0.7320.

BNZ Markets Today

Jason Wong -

The war in Ukraine remains the predominant driving force for markets. Speculation on a plan for the EU to jointly issue bonds saw German yields rocket higher, feeding through into US Treasury yields. Oil prices are higher as the UK and US adopt a Russian import embargo. The AUD and CAD have underperformed against some turmoil in commodity markets. The NZD has been less affected, after domestic rates surged following a domestic trading bank calling for 100bps of hikes by May.

BNZ Markets Today

Jason Wong -

Market volatility has continued in response to the war in Ukraine, with some extreme moves in commodity markets unnerving investors. Germany ruled out a Russian oil embargo, seeing a turnaround in some markets. Oil prices are well down from the heights during Asian trading and the NZD is down almost a cent from yesterday’s high. Global equities are down for the day, while global rates have pushed higher on higher inflation expectations.

BNZ Markets Today

Nick Smyth -

Markets were extremely volatile last week as investors grappled with the implications of the Russia-Ukraine conflict. Friday saw further weakness in equities, especially in Europe, big falls in government bond yields, and higher commodity prices. The EUR remains under pressure, falling below 1.10 to its lowest level since mid-2020, while the NZD and AUD have rallied on the back of surging commodity prices. The NZD ended the week around 0.6860, approaching its highs for the year. The NZ 2-year swap rate hit a new cycle high on Friday despite consumer confidence falling to recessionary levels.

BNZ Markets Today

Nick Smyth -

Markets remain volatile and focused on the Russia-Ukraine war. US equities and bond yields are lower overnight, partially reversing their big moves higher yesterday, while the EUR hit a fresh 18-month low. Wheat, corn and aluminium prices continue to push higher on supply fears although oil is slightly lower overnight on speculation of an imminent Iran nuclear deal. The NZD remains torn between the tailwind of higher commodity prices and the headwind of weaker risk appetite.

BNZ Markets Today

Nick Smyth -

Risk appetite has improved overnight, with equities and global rates both rebounding sharply. Fed Chair Powell endorsed a 25bps rate hike this month and kept the option of a 50bps move on the table for the future. Commodity prices continue to surge higher and this has helped support commodity currencies, with the NZD again approaching the 0.68 mark.

BNZ Markets Today

Jason Wong -

Risk appetite has soured and some turmoil in money markets is flowing through into bond markets, resulting in a massive rally in global rates. Global equities are much weaker and the VIX index has risen to its highest level in over a year. Oil prices are surging to fresh highs. Downward pressure remains on European currencies, while the other majors are fairly well contained. The NZD has performed well under the circumstances and is flat around 0.6760.

BNZ Markets Today

Jason Wong -

Markets have been volatile after weekend developments on the Russia-Ukraine war which included sanctions against Russia’s central bank. Weak risk sentiment at the start of Monday trading has given way, resulting in a recovery in global equities and the NZD and AUD have recovered significantly overnight. Bond yields have rallied, driven by the short end, as investors pare back expectations of policy tightening. Russian financial assets got slammed, with some spillover for those most exposed, including European financials and the euro.

BNZ Markets Today

Jason Wong -

Risk sentiment improved considerably on Friday night as the market digested developments on Russia’s invasion of Ukraine. US and European equities surged in the order of 2-3%. Germany’s 10-yr rate rose 6bps, while the US 10-year rate closed flat. The USD was broadly weaker, while commodity currencies and the euro showed decent gains. Over the weekend, more sanctions have been proposed against Russia, targeting its financial system and it looks like market volatility could continue for some time yet.

BNZ Markets Today

Nick Smyth -

Markets have been exceptionally volatile over the past 24 hours after Russia finally invaded Ukraine. Global equity markets initially plummeted, although the NASDAQ is now close to flat on the day and S&P500 is well off its lows. A broad range of commodity prices, from oil and gas to wheat and corn, have risen sharply on the prospect of supply disruptions. Government bond yields are also well off their intraday lows, with higher commodity prices having the potential to fan already elevated inflationary pressures. The USD has surged more than 1% on the back of safe haven demand while the euro hit its lowest level since mid-2020. The NZD has given up all its post-MPS rally (and some) and is back down to around 0.6660. RBNZ Governor Orr speaks this morning.

BNZ Markets Today

Jason Wong -

The market remains on edge after Russia’s military excursion into Eastern Ukraine but there have been few fresh developments overnight and market movements have been well contained. US and European equities show small falls, the US 10-year rate trades just under 2% and currency moves have been modest. The NZD has made another modest gain overnight, temporarily going up through 0.68, following the more hawkish than expected RBNZ, that resulted in a chunky lift in domestic rates.

BNZ Markets Today

Jason Wong -

Risk sentiment has improved since the NZ close, as the world tries to assess President Putin’s next move, after his first step towards a war with Ukraine. US equities are down for the day, but not as much as early trading in futures suggested. The US 10-year rate has headed back up towards the 2% mark. The NZD, AUD and EUR have outperformed overnight, with the NZD up to 0.6750 ahead of the RBNZ MPS today.

BNZ Markets Today

Jason Wong -

The new week has begun as it ended last week, with the market fixated on developments between Russia-Ukraine. The situation has deteriorated and imminent war remains a fair bet. The US is on holiday, but S&P futures and European equities are much weaker. US Treasury futures are slightly higher, but only suggesting a 1-2bps fall in the 10-year rate. Currency markets are less concerned about a war on European soil, and the NZD and AUD continue to recover against a soft USD backdrop.

BNZ Markets Today

Nick Smyth -

Risk appetite remains cautious as Russia-Ukraine tensions continue to mount. Equities and bond yields fell further on Friday while the USD appreciated on safe haven demand. The market pared back the likelihood of a 50bps Fed hike next month after NY Fed President Williams pushed back against the idea. The NZD performed well against what was a risk-off backdrop, ending the week around 0.67. Importantly, we believe that New Zealand government bonds have qualified for the World Government Bond Index (WGBI), with entry likely to take place later this year.