Markets Today

BNZ Markets Today

Nick Smyth -
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It was a reasonably quiet end to the week, with the S&P500 edging out a small gain and closing at its highest level since February. Ahead of the NZ CPI release tomorrow, the NZD was the weakest performing G10 currency. Offshore, there will be focus this week on Fed Chair Powell’s semi-annual testimony, US corporate earnings season and Chinese activity data.

BNZ Markets Today

Nick Smyth -
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Risk markets have recovered overnight as China didn’t
immediately retaliate to the President Trump’s latest
threat to impose tariffs on $200b worth of imports.
Against a backdrop of better risk sentiment, the NZD has
bounced a little, but it remains near multi-year lows.

BNZ Markets Today

Doug Steel -
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A bit of news over the past 24 hours. Shortly after we hit
the send button yesterday morning, President Trump
continued with plans to impose tariffs on an additional
$200b of Chinese goods by releasing a list of targeted
products. The US Trade Representative’s office said the
10% tariffs could take effect after consultations end on 30
August. If these proposed tariffs proceed, this would see
duties implemented by the Trump administration on China
cover about half of all US imports from that country. It is
another escalation in trade tensions. China condemned
the move and late yesterday afternoon said it would be
‘forced to retaliate to new US tariffs’. These developments
punctured the previously prevailing positive risk
sentiment.

BNZ Markets Today

Jason Wong -
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The new week has begun with a further recovery in risk appetite amidst light trading conditions. The AUD has modestly outperformed, while trading in GBP has been whippy, driven by political forces.

BNZ Markets Today

Jason Wong -
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The USD was broadly softer after the White House went
ahead with further tariffs on Chinese imports and it
weakened further after the US employment report. Risk
appetite was higher, with the market unperturbed by the
tariffs and China’s retaliatory response, which were well
anticipated. The NZD closed the week on a strong note
and modestly higher on all key crosses.

BNZ Markets Today

Jason Wong -
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Trading conditions remain lighter than usual following the
US holiday, with only modest movements in currency and
bond markets against a backdrop of stronger equity
markets.

BNZ Markets Today

Jason Wong -
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The US Independence Day holiday has meant quiet trading conditions and small movements in asset prices. The NZD has consolidated around the 0.6760 mark.

BNZ Markets Today

Jason Wong -
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The NZD has recovered, helped by a verbal intervention by
the PBoC to help support the yuan, on a day where US
equities and bond yields have moved lower.

BNZ Markets Today

Jason Wong -
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The beginning of the third quarter has got off to a rough start, with falling risk appetite seeing weaker equity markets and the NZD and AUD diving to fresh lows. Despite the negative risk tone, global bond yields remain steady.

BNZ Markets Today

Jason Wong -
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The USD was broadly weak on Friday, reflecting a mixture of news and position covering ahead of month-end. This saw the NZD recover a little from a fresh 2-year low, although much of the action was in local trading hours. There remained little action in global bond markets, while NZ rates fell further.

BNZ Markets Today

Jason Wong -
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The NZD has nudged down further in overnight trading,
sustaining further losses since the RBNZ’s OCR Review
yesterday, while CAD is a notable outperformer. US
equities and US 10-year yields are higher.

BNZ Markets Today

Jason Wong -
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The NZD has been one of the worst performers over the past 24 hours, although much of the damage was done during local trading hours, with only a small further fall overnight to just below 0.68. Risk appetite is weaker, with US equities slightly lower and UST10s down 5bps.

BNZ Markets Today

Jason Wong -
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US equities are modestly higher after yesterday’s chunky
sell-off, led by the energy sector on higher oil prices.
Against a backdrop of a broadly stronger USD, the NZD
has underperformed, while rates markets have barely
moved.

BNZ Markets Today

Jason Wong -
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Global equity markets have been rattled by focus on
escalating US-China trade tensions but there has been
limited spillover for currencies and bond markets.

BNZ Markets Today

Jason Wong -
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The NZD and AUD ended the week on a positive note on a day where the USD struggled to perform against the majors. Rates were little changed for the day.

BNZ Markets Today

Doug Steel -
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A generally quiet session overnight with a somewhat better mood prevailing in markets. Brushing off central bank concerns around trade tensions, stock markets are marginally higher, interest rates up a touch, while currency movements have been generally limited. Oil prices were mixed ahead of OPEC’s key meeting on Friday. The NZD has been a clear underperformer.

BNZ Markets Today

Nick Smyth -
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It’s been a volatile past 24 hours after President Trump’s
announcement that he was considering tariffs on $200b
worth of Chinese imports, a further escalation in US-China
trade relations. After a generalised flight to safety move
during yesterday’s Asian session, markets have recovered
some ground overnight. The EUR is weaker after a dovish
speech by ECB President Draghi . Meanwhile, the NZD
has fallen to around 0.69.

BNZ Markets Today

Nick Smyth -
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Markets were quiet overnight, with no fresh
developments on the US-China trade front and no major
data released. Oil prices rose over 2%, partially reversing
the falls seen on Friday, on reports that OPEC will agree to
only a small increase in production. The NZD has traded a
narrow range over the past 24 hours and is slightly lower
on the day.

BNZ Markets Today

Nick Smyth -
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After much anticipation, the US administration announced tariffs on $50b of Chinese imports on Friday with the Chinese government responding in-kind later that day. Commodities, commodity currencies and emerging markets reacted negatively to the threat of a “trade war”, although there has been little impact (yet) on US equities or bonds. Against this backdrop, the NZD has fallen to 0.6950, a three-week low.

BNZ Markets Today

Jason Wong -
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The USD is stronger across the board while the EUR has
been hit by a dovish ECB, which has also put downward
pressure on global rates. The NZD has performed okay
under the circumstances, rising on a few of the major
crosses.

BNZ Markets Today

Jason Wong -
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The USD was weaker heading into this morning’s FOMC announcement but has recovered after a more hawkish statement was delivered. UST yields are slightly higher post the announcement.

BNZ Markets Today

Jason Wong -
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Market volatility remains subdued. Currency movements
have been modest although the NZD and AUD have
slightly underperformed in overnight trading. Equity and
bond markets are little changed.

BNZ Markets Today

Jason Wong -
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It has been a quiet start to a huge week on the economic calendar and ahead of the historic US-North Korea leaders’ meeting.

BNZ Markets Today

Jason Wong -
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On Friday, market movements were modest ahead of the weekend’s G7 leaders’ summit. The market didn’t seem to care too much about the lingering US trade tensions with other major countries, even as Trump fired off a salvo of tweets highlighting the unfairness of current trade policy. As if actively seeking to agitate other G7 leaders further ahead of the weekend meeting, Trump suggested that Russia should be brought back into the fold, re-creating the G8 forum before Russia was expelled after Putin annexed Crimea a few years ago.

BNZ Markets Today

Jason Wong -
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There is currently a risk-off feel to markets, with focus on
emerging markets and this time Brazil being under the
pump. Under the circumstances, the NZD has held up
relatively well, against a backdrop of softer equity markets
and lower US Treasury yields.

BNZ Markets Research

Jason Wong -
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The AUD and EUR show the best gains for the day, with safe-havens JPY and CHF dragging the chain, against a backdrop of improved risk appetite, with equity markets up, the VIX index back below 12, and global bond rates higher.

BNZ Markets Today

Jason Wong -
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There has been plenty of news to digest but market
movements have been well-contained, with flat US
equities and global rates down a little. In currency
markets, GBP has outperformed, while the NZD is flat.

BNZ Markets Today

Jason Wong -
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Markets have brushed off increased US trade tensions and begin the week with positive risk sentiment, helping to support the AUD and NZD, while global bond rates edge higher.

BNZ Markets Today

Nick Smyth -
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Italian risks receded further last night, with the Five Star
and League parties agreeing to form a government with a
new choice of finance minister and two polls overnight
showing Italians overwhelmingly favour the euro. Market
focus has started to shift back to trade tensions, with the
US imposing tariffs on aluminium and steel from the EU,
Canada and Mexico and these countries promising to
respond in kind - equity markets are a moderately lower in
response. The NZD is back above 0.70 for the first time in
almost a month.

BNZ Markets Today

Nick Smyth -

Pressures on the Italian bond market eased overnight, with the 2 year Italian yield falling over 100bps. There have been reports that the League and Five Star might have another attempt at forming a government (presumably with a more mainstream choice of finance minister) while Five Star leader Di Maio has made some more reassuring comments. There has been a broad-based unwind of yesterday’s flight to safety moves, with equities higher, core bond yields higher and the EUR stronger. Against a backdrop of a stronger EUR and improving risk appetite, the NZD has risen close to 0.70.

BNZ Markets Today

Nick Smyth -
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Last night saw an absolute meltdown in the front-end of
the Italian bond curve and serious signs of capitulation.
The 2 year Italy-Germany spread closed around 190bps (!)
wider with the market concerned the upcoming Italian
election will be seen as a de facto vote on the EU/euro.
Signs of contagion have started to emerge with core bond
yields down sharply in other markets, major equity indices
down and the JPY and Swiss Franc strengthening.

BNZ Markets Today

Nick Smyth -
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Italian yields have skyrocketed again and the EUR weakened, as the market prepares for new elections in Italy, likely in Autumn. There remains relatively little contagion from Italy into other markets as yet, with S&P500 futures near unchanged and FX moves reasonably modest. It was a public holiday in the UK and US overnight and there was no major data released.

BNZ Markets Today

Nick Smyth -
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Oil prices fell sharply Friday after Saudi Arabia said it was “likely” OPEC and Russia would boost production. The decline in oil prices in turn pushed down core bond yields and energy stocks. Focus remains on European politics, with both Italy and Spain potentially set for new elections. Italy’s President vetoed the Eurosceptic choice of Finance Minister a short while ago, leading PM-elect Conte to give up on forming a government. The market has taken the news positively, with the EUR moving modestly higher this morning.

BNZ Markets Today

Jason Wong -
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Overnight market moves have been fairly modest, with a
hint of USD weakness, slightly weaker equity markets and
further downside pressure on global rates.

BNZ Markets Today

Jason Wong -
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Market sentiment has soured a little, seeing safe-haven currencies like JPY outperform, softer global equity markets and lower global bond rates, with UST10s dipping below 3%.

BNZ Markets Today

Jason Wong -
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Market movements have been small on a day with no
economic releases and only a few snippets of news.

BNZ Markets Today

Jason Wong -

In an uneventful start to the week, commodity currencies have modestly outperformed following the weekend news of a truce in the US-China trade war. UST10 yields have sustained their move lower seen at the end of last week.

BNZ Markets Today

Jason Wong -
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The NZD finished the week on a good note, rising on all major crosses against a backdrop of little news. UST yields fell steadily, ending the session 7bps lower from the high reached just before the NZ close.

BNZ Markets Today

Jason Wong -
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US bond yields continue to nudge higher, the USD has
been well supported overnight and the NZD is down
slightly on most crosses.

BNZ Markets Today

Jason Wong -
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The NZD is having a much better day after its recent rout, alongside a recovery in other commodity currencies and emerging market currencies. Despite UST yields sustaining yesterday’s upward move, US equities have shown a modest recovery.

BNZ Markets Today

Nick Smyth -
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The big news overnight is that the 10 year Treasury yield has broken above its highs from early 2014, and now sits at 3.08%. The rise in yields has boosted the USD, which reached new highs for this year, and weighed on equities. Amid the strong USD backdrop, the NZD has (again) underperformed and is around 0.6860.

BNZ Markets Today

Nick Smyth -
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US equities have made modest gains overnight, with Trump’s decision to reverse sanctions on China’s ZTE seen as a positive for trade negotiations between the two countries. European bond yields rose after ECB Governing Council member Villeroy implied the ECB was planning on raising rates at some point in 2019. Amid reasonably limited FX market moves, the NZD is the biggest mover overnight, and is back down to 0.6920.

BNZ Markets Today

Nick Smyth -
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Market movements were very subdued to end the week, with no top-tier economic data released. The S&P500 edged out a small gain to end up over 2% on the week, while the USD was slightly weaker. Overnight, Trump announced on Twitter that he had instructed the Commerce Department to reverse its sanctions on China’s ZTE, which the market will likely see as a key concession in the trade negotiations. The NZ Budget will be a focus for the local market this week.

BNZ Markets Today

Nick Smyth -
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Good Morning
US equities moved up to their highest level since mid-April and the USD fell after a slightly lower than expected US core CPI release. US Treasury yields declined slightly but market expectations of Fed tightening haven’t been materially affected. The BoE revised down its inflation forecasts in its Inflation Report and the market has pushed back rate hikes in the UK. The NZD is the worst performing currency the past 24 hours, with the market taking a dovish interpretation of the RBNZ MPS and Governor Orr’s comments afterwards.

BNZMarkets Today

Nick Smyth -
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President Trump announced a short while ago that he was pulling out of the Iran nuclear deal, although oil prices are unchanged on the day, implying the market had largely factored this in. The USD has extended its recent move higher, with Fed Chair Powell reinforcing the message that more rate hikes are coming. The NZD has made a new low for the year, below 0.70, as commodity currencies have underperformed overnight.

BNZ Markets Today

Nick Smyth -
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Oil prices pushed on to a new post-2014 high overnight ahead of President Trump’s decision tomorrow on whether to re-impose sanctions on Iran. Equity markets are also higher, buoyed unsurprisingly by energy stocks. Elsewhere, markets were very quiet, with no major data released and the UK on public holiday.

BNZ Markets Today

Nick Smyth -
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The US payrolls report on Friday was mixed, but the drop in the unemployment rate to 3.9% was enough to push the USD higher again. Equities also moved higher after the payrolls report even amid reports that US-China trade talks remained deadlocked. Emerging markets have come back into the market’s focus as well, with the Argentinean central bank raising its cash rate to 40%, to combat the decline in the peso. The NZD continues to hover around 0.70 ahead of Adrian Orr’s first RBNZ meeting this Thursday.

BNZ Markets Today

Jason Wong -
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In overnight trading the USD is mainly softer, adding to the initial move lower after the FOMC announcement yesterday, while UST yields have nudged a little lower as well. The NZD is modestly higher across the board.

BNZ Markets Today

Jason Wong -
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There have been only modest changes in currencies since this time yesterday, with the USD slightly weaker since this morning’s FOMC Statement. US equities and UST yields are little changed.

BNZ Markets Today

Jason Wong -
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As a new month begins, the stronger USD theme has continued with increases across the board, sending the NZD below 0.70 and big figures broken for other majors. Inflationary pressures see US rates a touch higher, while US equities are lower.

BNZ Markets Today

Jason Wong -
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The NZD has started the week on a soft note in a fairly quiet end to the month.

BNZ Markets Today

Jason Wong -
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On a historic day, market movements were remarkably modest. The USD lost a little ground after its strength earlier in the week, while the only real standout performer was a weaker GBP after growth missed expectations.

BNZ Markets Today

Nick Smyth -
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US equities have moved higher over the past 24 hours, boosted by stronger earnings (Facebook in particular). The EUR fell to a three month low after Draghi said the Governing Council hadn’t discussed monetary policy “per se” at its meeting. The 10 year Treasury yield has drifted back to a little under 3%.

BNZ Markets Today

Nick Smyth -
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The US 10 year Treasury yield finally breached 3% for the first time since the start of 2014. Higher rates have weighed on equities and probably helped the USD, which is stronger across the board once again. The NZD fell to year-to-date lows against the USD.

BNZ Markets Today

Nick Smyth -
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The US 10 year yield came within a whisker of 3% overnight, and remains close to the highs reached at the start of 2014. The higher US rate environment seems to be helping the USD, which strengthened across the board. The NZD fell to its lowest level since mid-January.

BNZ Markets Today

Nick Smyth -
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US Treasury yields rose again on Friday, with the 10 year yield up to 2.96%, its highest since early 2014. Equities fell again, with higher bond yields probably weighing, and the USD strengthened. The NZD is back down near to 0.72. Over the weekend, US Treasury Secretary Mnuchin mentioned he was considering a trip to China and was “cautiously optimistic” a deal could reached; this should help support risk assets to start the week.

BNZ Markets Today

Nick Smyth -
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Commodity prices remain in the spotlight, with oil prices
making a fresh high again overnight, although they have
since eased back. The 10 year US Treasury increased
again, with the yield curve steepening for a change, amid
higher inflation expectations. US equity markets are lower
and the USD stronger.

BNZ Markets Today

Nick Smyth -
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Most market moves have been reasonably modest
overnight, although US equities and bond yields have
pushed a little higher. Oil prices rose to a new, post-2014
high. The CAD and GBP have fallen after a dovish Bank of
Canada statement and lower than expected CPI
respectively. The NZD has again been one of the
underperformers in FX markets ahead of CPI today, and
NZD/AUD has eased back towards 0.94.