Back
6 May 2015
Market Movers: AUD/NZD shoots up as RBNZ easing expectations increase – TDS
FXStreet (Barcelona) - Prashant Newnaha, Strategist at TD Securities, summarizes the market performance during the Asian trading session, noting that NZD underperformed in the G10 space after mid-year easing expectations by the RBNZ increased.
Key Quotes
“The back up in ACGB and NZGB yields continued in Asia following overnight moves in European and US bond markets. ACGB yields are up +11.5bps at the 3yr part of the curve, and up +15bps in the 10yrs, underperforming vs the US, with yesterday’s RBA statement clearly having an impact. NZGB yields are higher as well, but are up a more modest 5bps, with today’s softer unemployment and wages data capping the rise in yields.”
“Market expectations for the RBNZ to cut mid year have increased following today’s trade data, to 50% by July. This saw the NZD as the sole G10 underperformer, -1% to US$0.7480 while the remainder of the G10 advanced by 0.35% on average (EUR +0.35%, AUD +0.3%), following the negative GDP read through from US trade data overnight. The AUDNZD kiwi had a massive leg up, rising from around NZ$1.0500 and is currently testing NZ$1.0650.”
“Regional equity markets are mixed. China related stocks are firmer, up anywhere between 1.3-2%, but have not recovered all of yesterday’s losses. In contrast, Korea and Australia are off 1.6%, with CBA down –4.8%, with div up only 1c not 2c as expected and increased capital burden.”
“The standout in the commodity space was the US$1 rise in Brent futures, currently at US$68.35. Iron ore futures for Sep delivery have tacked on another handy +2.7%, copper futures are down +0.2% and gold is at US$1195, +0.2%.”
Key Quotes
“The back up in ACGB and NZGB yields continued in Asia following overnight moves in European and US bond markets. ACGB yields are up +11.5bps at the 3yr part of the curve, and up +15bps in the 10yrs, underperforming vs the US, with yesterday’s RBA statement clearly having an impact. NZGB yields are higher as well, but are up a more modest 5bps, with today’s softer unemployment and wages data capping the rise in yields.”
“Market expectations for the RBNZ to cut mid year have increased following today’s trade data, to 50% by July. This saw the NZD as the sole G10 underperformer, -1% to US$0.7480 while the remainder of the G10 advanced by 0.35% on average (EUR +0.35%, AUD +0.3%), following the negative GDP read through from US trade data overnight. The AUDNZD kiwi had a massive leg up, rising from around NZ$1.0500 and is currently testing NZ$1.0650.”
“Regional equity markets are mixed. China related stocks are firmer, up anywhere between 1.3-2%, but have not recovered all of yesterday’s losses. In contrast, Korea and Australia are off 1.6%, with CBA down –4.8%, with div up only 1c not 2c as expected and increased capital burden.”
“The standout in the commodity space was the US$1 rise in Brent futures, currently at US$68.35. Iron ore futures for Sep delivery have tacked on another handy +2.7%, copper futures are down +0.2% and gold is at US$1195, +0.2%.”