Mon, Jan 18, 2021 @ 01:41 GMT
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Vaccine Waves Pass By Currency Markets

Currency markets shrug after Moderna announcement The Moderna vaccine announcement had a negligible effect on currency markets overnight. Asian and G-10 currencies were almost unchanged for the session, with only the pro-cyclical Canadian, Australian and New Zealand dollars outperforming. The US yield curve steepened after the Moderna announcement, and that...

Week Ahead – Focus Stays on COVID

Virus rages on, a wrath of Fed speak, US retail sales slower pace Next week is filled with lots of Fed speak, an expected sixth consecutive increase with US retail sales, and possible COVID-1 vaccine results from Moderna.  Financial markets remain fixated on the coronavirus, with much attention falling on...

Yen Extending Recovery as Treasury Yields Dip

Yen appears to be trying to reverse the losses posted earlier this week, as helped by pull back in treasury yields. US 10-year yield is trading at around 0.88 a the time of writing, well below this week's high at 0.975. German 10-year yield is also back pressing -0.55...

NZD/USD Rally Takes Pause

The New Zealand dollar is unchanged in Friday trade. In Friday’s European session, NZD/USD is trading at 0.6837. NZ dollar enjoying rosy November The New Zealand dollar has looked sharp in the month of November, posting gains of 3.4% during that time. On Thursday, profit-taking pressure resulted in the currency posting its...

Yen Recovers Further as Stocks Pull Back Continues

Commodity currencies turn softer today, following pull back in stocks. On the other hand, Yen, Swiss Franc and Dollar are gaining some grounds. Euro and Sterling are mixed on the sideline. Over the week, Kiwi remains the strongest one, followed by Dollar and then Sterling. Swiss Franc and Yen...

New Zealand BusinessNZ PMI dropped to 51.7, not getting too carried away with recovery

New Zealand BusinessNZ Performance of Manufacturing Index dropped from 54.0 to 51.7 in October. Production dropped from 56.7 to 51.1. New orders dropped from 58.1 to 52.4. But employment rose from 51.7 to 52.6. BusinessNZ's executive director for manufacturing Catherine Beard said that the sector remains in a state of...

RBNZ Orr: Be careful, be prepared and don’t run around on predictions

RBNZ Governor Adrian Orr said the improved growth and inflation projections in the latest Monetary Policy Statement released this week "is a very bod assumption". The central bank has been "at pains to explain to people that we are creating scenarios, not projections of certainty," he said. "If the economy...

Sterling Reverses after GDP, Dollar Ignores Jobless Claims and CPI

Sterling suffers notable selling today after slightly weaker than expected Q3 GDP data. Though, pull back against Euro could be a bigger driver for the profit-taking. Elsewhere, better than expected US job data and worse than expected Eurozone production data were generally ignored. For now, Aussie is following the...

The US Dollar Grinds Higher

US dollar drifting ahead of inflation, employment reports Holiday thinned trading saw the US dollar grind higher overnight, the dollar index rising 0.30% to 93.05. The steepening of the US yield curve, and an absence of other drivers have been supportive of the greenback this week. In the bigger picture,...

ECB Lagarde Taking Away The Lower Interest Rate Carrot Could Soften The Downside In The EUR/USD

Markets EU and US stock markets extended their bullish run yesterday, with Nasdaq returning to its leading role (+2%). Traded volumes were muted though with a lot of US investors out for Veterans' Day. German Bunds finally found a bid near sell-off lows, but didn't really gain momentum. German yields...

Yen Paring Losses as Markets Turn to Consolidation, Oil Faces Resistance

The financial markets are staying in consolidative mode. Asian stocks are mixed in tight range, following the mixed closes in US overnight. Gold is trading sideway ahead of key near term support. In the currency markets, Yen and Swiss France are mildly higher, paring some of this week's losses....

RBNZ Hawkesby sees less stimulus required, NZD/JPY extends rally

RBNZ Assistant Governor Christian Hawkesby said today that there is no change in forward guidance that OCR will stay at 0.25% until March 2021. Though, "less stimulus is required than we thought in August", even though a "substantial amount" is still needed. Negative rates is a policy tool for...

NZDUSD Breaks Away From A Diamond Pattern

The US Dollar was bullish against most of its major pairs on Wednesday with the exception of the NZD. On the US economic data front, the Mortgage Bankers Association's Mortgage Applications fell 0.5% for the week ending November 6th, compared to +3.8% in the week before. On Thursday, the Consumer...

Investors Full of Optimism

Investors full of optimism A more muted session on Wednesday, which is likely to continue as the US and others observe Veterans Day and markets settle after a vaccine boost in recent days. The vaccine news feels like a real game-changer for these markets. The first time in months that optimism...

RBNZ Lights A Fire Under The Kiwi, Sterling Climbs

RBNZ plays down negative rates, kiwi flies Sterling leaps after divisive bill suffers crushing defeat in Lords Markets in a cheerful mood overall, but watch the Fed Kiwi charges higher after RBNZ ‘disappoints’ The kiwi dollar took off like a rocket on Wednesday, extending the gains it recorded amid all...

Lest We Forget, It’s Singles Day

Activity is likely to be muted in Asia today with the United States on holiday commemorating Veterans Day. It is also a partial holiday in Canada and parts of Europe. Price action overnight certainly reflected one eye on the door ahead of today's holiday, with Wall Street equity markets...

RBNZ Is Pushing NZD Higher

This morning, the Reserve Bank of New Zealand kept its benchmark rate unchanged at 0.25% as expected. RBNZ said additional stimulus would be provided through a Funding for Lending Programme (FLP), commencing in December, and "monetary policy will need to remain stimulatory for a long time". It added in...

New Zealand Dollar Turns Higher After RBNZ Decision

The New Zealand dollar rose to the highest level since March after the country’s central bank delivered its interest rate decision. The bank left interest rates unchanged at 0.25% and hinted that the rate will remain at this level in the first quarter of 2021. It also said that...

New Zealand Dollar Rises after RBNZ, US Yield Resilient

New Zealand Dollar surges broadly today as markets see that RBNZ has less need to cut into negative next year. Kiwi's strength is somewhat taking Aussie higher too. On the other hand, Sterling is paring some of yesterday's strong gain while Dollar is following as second weakest for now....

Chance of Negative OCR Reduces as RBNZ More Confident About Economic Outlook

RBNZ announced that a Funding for Lending Program (FLP) will be implemented in “early December” with an initial size of about NZD 28B. Further details will be announced in coming weeks. The program aims at providing loans to commercial banks at low cost (e.g.: 0.25%). The central bank left...

NZD/USD surges after RBNZ, targeting 0.7131 next

NZD jumps even though RBNZ maintained a dovish tone. Some analysts noted that the FLP could be enough to stimulate the economy as recovery remains on track. Additionally, if a vaccine becomes available early next year, RBNZ might not need to cut rates into negative territory. An RBA style...

RBNZ keeps OCR at 0.25%, launches new stimulus with FLP

RBNZ decided to keep the Official Cash Rate unchanged at 0.25% today while the Large Scale Asset Purchase Programme will continue, up to NZD 100B. The central bank introduced additional stimulus through a Funding for Lending Programme, commencing December, to lower banks' funding costs and lower interest rates. RBNZ also...

Wall Street Charges Higher On Vaccine News, But Bond Market Ruins The Party

US stock market hits new records after Pfizer vaccine announcement Crude oil and commodity currencies soar, yen crumbles alongside gold However, the party doesn’t last – stocks give up most gains, dollar reverses higher RBNZ meeting coming up, vaccine and stimulus news remain in focus Pfizer vaccine news catapult...

RBNZ Set To Launch New Lending Programme, Negative Rates May Have To Wait

The Reserve Bank of New Zealand is due to announce its latest policy decision on Wednesday (01:00 GMT) and will present its updated forecasts in the Monetary Policy Statement to be published at the same time. New Zealand’s economic prospects have started to turn up lately as the country...

Currency Pair of the Week: NZD/USD

The Reserve Bank of New Zealand (RBNZ) meets on Wednesday to discuss interest rate policy and is expected to leave its official cash rate (OCR) unchanged at 0.25%.   At the September meeting, policy makers discussed the possibility of using negative interest rates to help achieve its employment and inflation...

Yen and Dollar Heading Lower as Asian Markets Rally

Yen and Dollar weaken generally in Asian session today as strong risk appetite continues. Notable rally is also seen in gold today, extending its near term rally. New Zealand Dollar is currently leading other commodity currencies higher. European majors are generally mixed. Focus would turn to the neverending Brexit...

RBNZ Preview – Introducing New Lending Program with Dovish Tone Maintained

The focus of this week's RBNZ meeting is on details of the Funding for Lending (FLP) program. We expect this program would be implemented before the end of the year and would be the key policy tool of the central bank in the future. Concerning other monetary measures, the...

Week Ahead – What Next after Election Mayhem?

One to remember I think it’s safe to say, last week more than lived up to expectations. We may never see a US election like it again. What is remarkable is how relaxed traders have been throughout. And to think, this was only one of a number of major risk...

Week Ahead – The Calm after the US Election Storm

It’s a relatively quiet week coming up for global markets as the election dust settles. The main event will be the RBNZ policy meeting, though frankly, the real driver for most currencies and stocks may be the ‘aftershock’ effects of the election. There’s also a slew of economic data,...

NZ Dollar Surges To 19-Mth High

The New Zealand dollar continues to push higher against the sagging US dollar. NZD/USD is trading at 0.6783 in the European session, up 0.45% on the day. On the fundamental front, today’s highlight is US Nonfarm payrolls, which is projected to dip to 595 thousand, down from 661 thousand...