Markets Today

BNZ Markets Today

Nick Smyth -

After a rocky couple of trading sessions, equities and bond yields have rebounded overnight. Volatility is high and sentiment fickle and much will depend on news on Omicron over the coming days and weeks. Currencies have seen limited movement overnight, with the NZD hovering just above 0.68. Yesterday saw a huge flattening in the NZ yield curve, with the gap between 5-year and 10-year swap rates shrinking to 0bps for the first time since the GFC.

BNZ Markets Today

Jason Wong -

Market sentiment continues to sway, with risk appetite turning positive yesterday afternoon, supporting a recovery in equity markets and commodity currencies on a 24 hours basis. Still, the recovery remains unconvincing, with US rates barely higher and the preeminent safe-haven currency, the yen, being the strongest overnight performer. The NZD and AUD have slipped overnight.

BNZ Markets Today

Jason Wong -

It has been a rocky trading session overnight, with risk sentiment hit by a double blow of sobering comments by Moderna’s CEO on the Omicron variant and hawkish commentary by Fed Chair Powell in front of lawmakers. Global equity markets are under pressure, the VIX index has spiked back up to 28 and the Treasury market shows a decent flattening in curve. Commodity currencies have underperformed, with the NZD printing a fresh low, while safe haven currencies have been in demand.

BNZ Markets Today

Jason Wong -

Some of Friday’s “risk-off” price action has reversed, as investors show less fear about the new COVID19 variant Omicron. The S&P500 is currently up 1.6% while the US 10-year rate is up 6bps. The USD has been well supported, seeing the NZD continue to struggle, going sub-0.68 to a fresh low for the year, underperforming other commodity currencies, with the AUD relatively flat.

BNZ Markets Today

Nick Smyth -

What was expected to be a quiet post-Thanksgiving session on Friday turned into a mini market meltdown, as investors took fright at the discovery of new Covid-19 variant, Omicron. Equities and oil prices plunged while government bond yields fell sharply as investors scaled back expected tightening from central banks. Risk-sensitive currencies, including the NZD, fell while the JPY and EUR appreciated strongly. Markets are likely to remain volatile until more information is known about the variant and particularly how effective the current crop of vaccines are against it.

BNZ Markets Today

Jason Wong -

Another string of strong US data releases and another FOMC member potentially joining the faster QE taper camp have supported higher US short rates and the USD. That has added to downside pressure on the NZD seen after the RBNZ’s 25bps hike yesterday, sustaining a sub-0.69 move lower, and down on all the key crosses.

BNZ Markets Today

Jason Wong -

The aftermath of the reappointment of Powell as Fed chair has continued into another day, with US Treasuries pushing 3-4bps higher, and US equities not liking the higher rates backdrop. Currency markets show modest changes. EUR is on a slightly better footing after stronger PMI data and some hawkish ECB-speak. The NZD continues to languish, ahead of today’s RBNZ MPS.

BNZ Markets Today

Jason Wong -

US equities, bond yields and the USD dollar are all higher after President Biden reappointed Powell as chair of the Fed. US Treasury yields are up 5-7bps. The stronger USD backdrop sees the NZD head lower, down 0.7% to 0.6955, but the AUD has managed to hold its ground after last week’s notable underperformance.

BNZ Markets Today

Nick Smyth -

News that Austria will go into lockdown, as it battles surging Covid cases, hit risk sentiment on Friday, triggering falls in long-end global rates and the euro. Meanwhile, hawkish commentary from Fed officials, raising the possibility of a faster tapering timeline, boosted Fed rate hike expectations and the USD. The NZD fell to around 0.70 amidst a stronger USD backdrop. The main event this week is the RBNZ MPS, with the market evenly balanced between a 25bps hike and a 50bps move. The NZ 2-year swap rate continues to make new highs with liquidity still strained.

BNZ Markets Today

Nick Smyth -

Offshore markets have been relatively quiet overnight. There have been small gains in US equities while bond yields and the USD are slightly lower. The NZD and NZ rates were higher yesterday after a jump in the RBNZ’s inflation expectations survey. The NZ 2-year swap rate hit its highest level since early 2017 with nerves running high ahead of the RBNZ’s MPS next week.

BNZ Markets Today

Jason Wong -

Markets are showing signs of consolidation, with little change in global equities, US rates down slightly and the NZD tracking around 0.70. GBP has outperformed following another positive inflation surprise.

BNZ Markets Today

Jason Wong -

Strong US economic data and a strong UK labour market report have set the tone for markets overnight, with the USD and GBP outperforming, sending the NZD down below 0.70 and the AUD towards 0.73. There has been less reaction in the bond market, with US Treasuries trading a tight range.

BNZ Markets Today

Jason wong -

Global rates have pushed higher on the back of some hawkish central bank commentary, with US break-even inflation rates up to fresh highs. There’s a slightly risk-positive tone in currency markets, seeing small outperformance of commodity currencies.

BNZ Markets Today

Nick Smyth -

Equity markets recovered further on Friday after their post-US CPI sell off earlier in the week. The USD was weaker, although it remains near a 12-month high, while the NZD recovered to 0.7040. Bond yields consolidated while US inflation expectations continue to make new highs.

BNZ Markets Today

Nick Smyth -

Markets have been quieter overnight, with the US bond market closed for Veteran’s Day and no major economic data released. US equities have recovered a little from their post CPI sell-off while the USD has pushed up to its highest level in more than a year. The NZD has fallen to around 0.7015 amidst broad-based USD strength. In other news, the NZ government announced that it plans to issue an inaugural sovereign green bond late next year.

BNZ Markets Today

Jason Wong -

Team transitory suffered a blow after another shockingly high US CPI print that has reverberated across markets, seeing much higher US rates across the curve and spilling over into Australian bond futures. The data supported the USD, dragging the NZD below 0.71, while the AUD is finding support around 0.7350.

BNZ Markets Today

Jason Wong -

Risk sentiment is weaker for no obvious reason, with US equities on track for a rare fall today while global bond markets show a broadly-based rally, sending the US 10-year rate down to the low 1.40s. Daily currency movements have been minimal apart from notable weakness in the NZD and AUD.

BNZ Markets Today

Jason Wong -

It’s been a quiet start to the week, with global equity markets flat to slightly higher, US Treasuries reversing some of Friday’s rally, and a more risk-positive tone in currency markets that sees the NZD pushing up into the high 0.71s.

BNZ Markets Today

Nick Smyth -

Friday’s nonfarm payrolls report was stronger than expected, although it is unlikely to change the Fed’s economic outlook and tapering plans. Global rates fell sharply, with the US 10-year rate dropping to 1.45%, as the market continued to digest the BoE’s on-hold decision the previous night. Equities continue to grind higher while the USD was slightly weaker, the NZD ending the week around 0.7120.

BNZ Markets Today

Nick Smyth -

The main news overnight has been the Bank of England’s shock decision not to raise interest rates, which the market had fully priced in. UK rates fell as much as 20bps and the GBP slumped 1.4%, with the decision reverberating to other bond markets (US 10-year rate -9bps). Equities continue to grind higher, with the S&P500 and NASDAQ hitting fresh record highs. The NZD has fallen almost 1% and is back down to 0.71. Focus shifts to the nonfarm payrolls report tonight.

BNZ Markets Today

Jason Wong -

Market movements have been well-contained ahead of the FOMC meeting this morning and in the initial aftermath of the statement, which didn’t surprise. We await Fed Chair Powell’s press conference, where he will likely be probed on the timing of the first rate hike, and there will be interest in how much he pushes back on market pricing for hikes from the second half of next year.

BNZ Markets Today

Jason Wong -

Newsflow overnight has been light, but yesterday’s RBA announcement and update by Governor Lowe triggered a fall in the AUD, and the NZD has fallen just as much, both currencies down about 1.2% from this time yesterday, seeing the NZD test 0.71. US equities continue to print record highs, while the bias for global rates has been to the downside, ahead of the important Fed update in 24 hours.

BNZ Markets Today

Jason Wong -

Newsflow to begin the new week and month has been slow, but things will pick up pace as the week progresses. The lift in risk appetite seen through October, has spilled over into November, with fresh highs in global equity markets, a bid tone to commodity currencies, and global rates pushing higher.

BNZ Markets Today

Nick Smyth -

Bond markets remain volatile amidst high inflation and growing expectations that central banks will bring forward interest rate hikes. Friday saw the highest quarterly wage growth in the US in almost 40 years and European core inflation above the ECB’s 2% target for the first time since 2002. The US 10-year rate fell slightly on Friday but there were big movements in Australia after the RBA decided against enforcing its Yield Curve target once again, signalling that it will ditch the policy and its 2024 rate guidance at its meeting tomorrow. NZ rates had some respite on Friday, falling back after their big moves higher earlier in the week. The USD was stronger on Friday, with the EUR giving back its post-ECB gains and the NZD falling back below 0.72. Equities continue to edge higher.

BNZ Markets Today

Nick Smyth -

Global bond markets remain very volatile, even though there hasn’t been much spill over into other asset classes like equities and currencies at this stage. Yesterday saw a huge move higher in Australian short-end rates after the RBA decided not to enforce its Yield Curve Control target, with NZ short-end rates increasing sharply in response. Overnight, the EUR is higher as President Lagarde stopped short of saying market pricing for rate hikes next year was wrong. Equity markets have increased, the USD has weakened, and the NZD has bounced back to 0.72.

BNZ Markets Today

Jason Wong -

There has been a notable rally in the global bond market, sparked by a slashing of UK debt supply following the UK Budget and talk of month-end buying, with a hawkish Bank of Canada thrown into the mix. The US curve shows a significant flattening, with higher short rates and the 10-year rate down 8bps. CAD has outperformed, while the USD is broadly weaker, supporting a modest rise in the NZD.

BNZ Markets Today

Jason Wong -

On a quiet news day, global equity markets have continued to trend higher, with the S&P500 printing a fresh record high. Bond markets have been well contained, albeit with a continuing push higher in break-even inflation rates across the US and Europe. Currency markets remain in a consolidation mode, although a better-bid USD overnight has seen the NZD trade near the bottom end of its range for the day, currently 0.7160.

BNZ Markets Today

Nick Smyth -

There hasn’t been any major news or data to drive markets overnight. Market movements have been reasonably limited, albeit with a slight risk-off tone. The S&P500 is broadly flat, commodities are lower, while US bond yields are higher as the market brings forward Fed rate hike expectations. The NZD made a fresh 4½-month high yesterday, just below 0.7220, but it has turned lower overnight amidst broader weakness in commodity currencies.

BNZ Markets Today

Jason Wong -

On another slow news day, risk sentiment has further improved, taking the S&P500 to within a whisker of a fresh record high, while global yields have been well-contained. Against the backdrop of a soft USD, the NZD has pushed up through 0.72 and while the AUD is up through 0.75.

BNZ Markets Today

Jason Wong -

Despite little news, risk appetite is higher, with global equity markets showing gains, the NZD and AUD at the head of the leaderboard, and global 10-year rates pushing higher.

Despite the long list of worries we have reported on in previous editions, risk appetite has improved with no obvious triggers, although at the margin one could point to the good start to the US earnings season and the market pulling in its horns on Fed tightening prospects as supporting the overnight moves.

BNZ Markets Today

Jason Wong -

Trading for the new week has begun with mixed performance for equity markets, global rates nudging higher, volatile energy markets and only modest currency movements. There has been more action in the NZ market, with rates surging after a whopper CPI print, but resulting in only a modest gain for the NZD.

BNZ Markets Today

Nick Smyth -

For all the recent talk of stagflation, last week’s price movements suggest that the reflation trade might be making a comeback. Equities and commodities were again higher on Friday with the NZD outperforming, closing the week around 0.7070. The US 10-year rate rebounded to near its recent high with the market continuing to bring forward the expected timing of the Fed’s first hike, with June 2022 now almost 50% priced. Last week saw an almost 20bps increase in the key NZ 2-year swap rate ahead of this morning’s CPI release, which we expect to be a whopper.

BNZ Markets Today

Nick Smyth -

It has been a good session for risk assets overnight, with equity markets up strongly on better than expected earnings, commodity indices hitting fresh highs and commodity currencies appreciating, the NZD breaking back above the 0.70 mark. The bond market has brushed off yesterday’s strong US CPI number, with the US 10-year rate falling towards 1.50%. In the local rates market, the 2-year swap rate keeps pushing higher, up another 3bps yesterday, to 1.60%.

BNZ Markets Today

Nick Smyth -

It has been a good session for risk assets overnight, with equity markets up strongly on better than expected earnings, commodity indices hitting fresh highs and commodity currencies appreciating, the NZD breaking back above the 0.70 mark. The bond market has brushed off yesterday’s strong US CPI number, with the US 10-year rate falling towards 1.50%. In the local rates market, the 2-year swap rate keeps pushing higher, up another 3bps yesterday, to 1.60%.

BNZ Markets Today

Nick Smyth -

Market movements have been subdued overnight. Equities are flat-to-slightly lower, the US 10-year rate has stabilised, while the USD continues to push higher. The market awaits the US CPI release tonight amidst growing global inflation concerns and increased recognition amongst central bankers around upside inflation risks. Yesterday saw fresh multi-year highs in NZ swap rates across the curve, with the key 2-year rate pushing above 1.50%.

BNZ Markets Today

Nick Smyth -

While the US bond market has been closed for Columbus Day and no major economic data has been released, there have still been some big price movements overnight. Oil prices continue to head higher, helping to push up global bond yields, as inflation concerns mount. USD/JPY has jumped 1%, to above the 113 mark, while the AUD continues to outperform as NSW starts reopening its economy. The NZD is slightly higher over the past 24 hours, trading this morning around 0.6945.

BNZ Markets Today

Nick Smyth -

Friday’s nonfarm payrolls report was a mixed bag, with employment growth lower than expected but wage growth and the unemployment rate better than expected. The consensus is that the report won’t deter the Fed from announcing tapering in November. Bond yields continue to head higher amidst renewed inflationary concerns, with the US 5-year rate hitting an 18-month high and the NZ 10-year swap rate reaching a fresh 2½-year high. Equity and currency moves were relatively restrained post-payrolls, the NZD closing the week around 0.6930.

BNZ Markets Today

Nick Smyth -

Russian President Putin’s offer to help fix the European gas crisis and a short-term deal to extend the US debt ceiling have bolstered market sentiment. Equity markets have rebounded strongly, the US 10-year rate has pushed up to its recent high, and commodity currencies have rallied, with the AUD leading the way. Markets now await the all-important nonfarm payrolls report tonight.

BNZ Markets Today

Jason Wong -

A risk-off tone is evident, with global equities lower, safe-haven currencies well supported, while global rates markets show little net change. President Putin has saved a bigger market correction, by stepping in and calming the natural gas market, a recent source of angst. The NZD is near the bottom of the leaderboard, with global forces in charge and the much anticipated RBNZ rate hike not offering any support.

BNZ Markets Today

Jason Wong -

US equities have recovered after yesterday’s spat. A range of commodity prices continue to break higher ground, pushing up break-even inflation yields and leading to higher global rates. Overnight, the NZD and AUD have recovered losses during local trading hours, the NZD now little changed over the past 24 hours at 0.6970.

BNZ Markets Today

Jason Wong -

US equities are down 1½-2½% but it looks more like a sector rotation than a big risk off move. US rates are slightly higher while the USD has given up some recent ground and shows a broadly based fall. This sees the NZD on a better footing, up modestly to 0.6965.

BNZ Markets Today

Nick Smyth -

After what was a rocky week, market sentiment improved on Friday, with the S&P500 gaining more than 1% and the USD depreciating. The NZD and AUD finished the week on a positive note, with the NZD closing around 0.6940 and the AUD around 0.7260. It’s a big week ahead with the RBNZ expected to increase the OCR on Wednesday for the first time since 2014, despite most of the Waikato joining Auckland in Covid alert level 3 today, the all-important US nonfarm payrolls report on Friday.

BNZ Markets Today

Nick Smyth -

There has been plenty of news overnight but with no clear theme in asset class movements. Equity markets are generally lower, with the S&P500 set for its worst month since March last year, the US 10-year rate is little changed, while the USD has given back a little of the previous day’s sharp appreciation. The NZD has edged up towards 0.69.

BNZ Markets Today

Jason Wong -

Markets have calmed down after yesterday’s broad sell-off, but the slight fall in global rates and lift in global equities looks unconvincing. There is more turmoil in currency markets, with another broadly-based surge in the USD seeing the NZD and AUD tumble further, alongside other major currencies.

BNZ Markets Today

Jason Wong -

The number and extent of global growth potholes are growing and there’s a whiff of stagflation concerns in the air, with global equity markets tumbling amidst a further incremental lift in global bond yields. Currency traders have flocked to safe-havens, seeing a broadly-based rise in the USD and the NZD and AUD tumbling 1% overnight, although GBP has seen the biggest fall, down 1.4%.

BNZ Markets Today

Jason Wong -

After last week’s more hawkish tilt by some key G10 central banks, the global reflation trade looks to be re-emerging as a theme. US equities show a rotation back into cyclicals, global rates continue to push higher, commodity prices are on the charge, and commodity currencies have outperformed, although the NZD has been flat and lagged the modest gains for AUD and CAD.

BNZ Markets Today

Nick Smyth -

After what was a hectic week, market movements were more restrained on Friday. The US 10-year rate pushed up to its highest level since the start of July, at 1.45%, while the S&P500 was broadly unchanged. The NZD ended the week back near the 0.70 mark amidst a stronger USD.

BNZ Markets Today

Nick Smyth -

Global bond yields have had a sharp move higher overnight, with the US 10-year rate jumping 11bps, to above 1.40%, its highest level in over two months. Driving the moves higher in global rates has been more hawkish messaging from central banks, including the FOMC yesterday and the Bank of England overnight, which opened the door to a rate hike before the end of the year. Equity markets have been unperturbed. The S&P500 is up almost 1.5%, helped by some easing of concerns around the Evergrande situation. Currencies have traded with a risk-on pattern, seeing the USD and JPY lower and the NZD back to 0.7075.

BNZ Markets Today

Jason Wong -

Risk appetite has improved, as Evergrande survives another day, with a negotiated coupon payment, and the market wasn’t spooked by the US FOMC policy update, even as it moved in a more hawkish direction. US equities are up near 1%, the US 10-year rate is little changed, while net currency movements have been modest. The NZD continues to languish around 0.70.

BNZ Markets Today

Jason Wong -

After yesterday’s slump in risk appetite, markets have settled, even if we are still in the dark about the next move on Chinese property developer Evergrande. US equities are flat, global rates have traded sideways and commodity currencies have modestly underperformed, with the NZD finding some support near 0.70.

BNZ Markets Today

Jason Wong -

The new week has begun with a plunge in risk appetite as fears mount of contagion risk from the imminent collapse of Chinese developer Evergrande. Global equity markets have seen some chunky falls, global rates have rallied and commodity prices are weaker. Currency market reaction has been relative contained, with only some modest underperformance by the NZD and AUD and a small gain for the USD.

BNZ Markets Today

Nick Smyth -

Markets traded with a risk-off tone on Friday, with equity markets lower again, the USD stronger, and the NZD back down to 0.7040. The US 10-year rate continued to edge higher, trading near a two-month high on Friday, as the market looked ahead to the Fed meeting this week. The key local event this week is RBNZ Assistant Governor Hawkesby’s speech tomorrow morning which, with market pricing finely balanced between a 25bps hike and a 50bps move next month, could be market moving.

BNZ Markets Today

Jason Wong -

Post a much stronger than expected US retail sales print, the USD is stronger across the board and US rates are higher. The NZD has lost the gains seen after the stonker Q2 GDP report, languishing back below 0.71.

BNZ Markets Today

Jason Wong -

US equities have rebounded overnight after a risk-averse trading session during Asian and European time-zones. Following softer US inflation in the previous overnight session, UK and Canadian inflation positively surprised and stronger oil and natural gas prices have added to an inflationary picture, driving global rates higher. Currency markets have been well-contained, with only oil-sensitive CAD and NOK showing much signs of life. The NZD remains stuck around 0.71.

BNZ Markets Today

Nick Smyth -

US CPI inflation data overnight was slightly softer than expected, driving a 5bp fall in the US 10-year rate. The S&P500 is modestly lower again while the USD is little changed. The AUD is the weakest of the majors over the past 24 hours amidst more cautious risk appetite and dovish talk from RBA Governor Lowe. The NZD/AUD cross has pushed up towards the 0.97 mark. Yesterday, New Zealand Debt Management issued the first NZ 30-year government bond, with very strong offshore demand evident.

BNZ Markets Today

Jason Wong -

Market price action has been fairly muted at the start of the new week. US equities are slightly lower, the US 10-year rate has drifted down a couple of basis points and currency movements have been small, with the NZD treading water around the 0.71 mark.

BNZ Markets Today

Nick Smyth -

Equities ended last week on a soft note, with the S&P500 falling almost 1% on Friday, while the USD strengthened against a backdrop of more cautious risk appetite. Global rates rebounded from their falls on Thursday night, helped by a lift in commodity prices. The NZD ended the week just above 0.71 while the NZD/AUD cross continues to grind higher, now up to 0.9670.

BNZ Markets Today

Nick Smyth -

Global rates have dropped overnight, with 10-year US and German rates down by around 4bps. The ECB confirmed it would reduce its bond buying pace from next month, but the market was seemingly braced for more hawkish guidance. The USD has weakened overnight, with the EUR lagging most other currencies after the ECB meeting. The NZD is back above 0.71 with market now pricing a small chance of a 50bp OCR hike at the RBNZ’s October meeting.

BNZ Markets Today

Jason Wong -

Investors remain cautious, with modest weakness in US equities, while the US 10-year rate has reversed yesterday’s increase, tracking lower to 1.33%. There have been a few updates from various central banks, but none of them market moving. Currency moves have been modest, with the NZD continuing to hover around the 0.71 mark.

BNZ Markets Today

Jason Wong -

There hasn’t been much news but risk appetite is weaker overnight, with US and European equity markets on the soft side and the USD recovering further. AUD and CAD are the weakest currencies, while the NZD has gravitated to 0.71. Global bond markets are weaker, with 10-year rates up in the order of 4-5bps across the US and Europe.

BNZ Markets Today

Jason Wong -

With the US on holiday, overnight trading and news has been uneventful. Global equity markets continue their record-breaking run, while the USD has found some support after weakening last week. Both the NZD and AUD are slightly softer to start the new week, after a blistering recovery over the past fortnight.