Tag Archives: New Zealand dollar

RBNZ Expected To Hike Official Cash Rate

Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the financial markets:

Main Trading Event Of The Day: NZD Official Cash Rate @ 21.00 GMT

WHAT WE’RE WATCHING TODAY

RBNZ Expected To Hike Official Cash Rate

The Reserve Bank of New Zealand is widely expected to lift the official cash rate a further 25 bps when it meets today. However, there is less consensus on the indications the bank may provide about the timing and pace of future hikes. The RBNZ began lifting the OCR from historically low rates in March to the current 3.00% and at the time signaled regular increases at six weekly intervals through September. Since then the balance of factors has shifted. While dairy prices have declined and the pace of gains in house prices has slowed, the exchange rate has remained steady, migration has soared, and economic data have surprised to the upside. The net balance doesn’t change expectations for a hike on Thursday but economists differ on whether this raises the odds of a hold in July and the number of OCR hikes that are likely this year. Expectations range from another 25 basis hike by December, following the likely Thursday hike, to three more hikes that will take the OCR to 4.00%.The money market is expecting a total of two hikes by December. Reserve Bank governor Graeme Wheeler will release the bank’s decision today @ 21.00 hours GMT. The bank’s statement will include an updated set of economic forecasts in the quarterly Monetary Policy Statement.

Euro Under Pressure In Asia As Stocks Sit On Gains

The euro came under fire today as the European Central Bank’s embrace of negative interest rates encouraged flows out of the Eurozone, while Asian shares consolidated near recent highs. In contrast the dollar found support in a run of improving U.S. economic data which has increased speculation that the Federal Reserve might sound less dovish on policy when it meets next week. The euro fell to $1.3524 and further away from a $1.3668 peak scored at the start of the week. It also hit a seven-month trough on the higher-yielding Australian dollar and to near its lowest against the pound since late 2007.Action in equity markets was more muted with many indices already having come a long way. MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.2 percent from a three-year peak. Japan’s Nikkei edged up 0.3 percent aided by MSCI’s decision to remove South Korea and Taiwan indexes from its review list for reclassification to developed markets, keeping them in the emerging markets classification. Moves were minor on Wall Street with the Dow up 0.02 percent, while the S&P 500 down 0.02 percent.

Google Buying Satellite Company For $500 Million

Google is buying Skybox Imaging, a 5 year old startup, in a deal that could serve as a launching pad for the company to send its own fleet of satellites to take aerial pictures and provide online access to remote areas of the world. The $500 million acquisition will initially provide Google with the means to improve the quality and immediacy of the satellite imagery used in its digital maps. Google plans to use Skybox’s satellite already in orbit to supplement the material that it licenses from more than 1,000 sources, including other satellite companies. Eventually, though, Google hopes to build more satellites that could be used to beam Internet access to points around the world.

That sums up today’s highlights! Check into our Facebook, Twitter and Google+ pages for regular updates on all the tradable events of the day. We hope you have a profitable day on the markets.

Just A Minute!

Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the markets:

Main Trading Events Of The Day: USD Retail Sales m/m @ 12.30 & USD Unemployment Claims @ 12.30 GMT

WHAT WE’RE WATCHING TODAY

U.S. Retail Sales & Unemployment Data Releases

Economists expect to see an increase of 0.2 percent when February retail sales are reported today, better than January’s 0.4 percent decline. The retail “control” number is expected to be up 0.3 percent. This number relates to retail sales, minus autos, gasoline and building materials and could positively influence first quarter GDP. Besides retail sales, weekly jobless claims are expected today. The unemployment rate was at 6.7 percent last month. Traders will also be watching the testimony before the Senate Banking Committee, in particular, for remarks about the Fed’s current policy and the focus on financial stability since economic normality has not yet been restored. The hearing puts the focus on next week’s Fed meeting, the first to be presided over by Fed Chair Janet Yellen. How the Fed will back off from its unemployment target of 6.5 percent is of major interest to markets and is likely to be a topic next week. Fed officials have been backing away from their target of a 6.5 percent unemployment rate set as a level to begin considering a reversal of its low short-term rate policy, stressing that it is a target, not a trigger. The Fed has the chore of moving markets away from ‘quantitative easing’ to ‘qualitative easing.’ It’s widely expected to reduce its bond purchases, or quantitative easing program, by another $10 billion next week.

New Zealand Dollar Jumps Following Key Rate Hike

The Reserve Bank of New Zealand increased its key interest rate by 25 basis points to 2.75%, in line with expectations. The New Zealand dollar rose to an intraday high late Wednesday in New York following the decision, trading at 85.18 U.S. cents versus 84.52 U.S. cents a day earlier. The decision behind the rate hike was attributed to increasing inflationary pressures. According to the central bank, in the current environment it is important that inflation expectations remain contained and to achieve this, it is necessary to raise interest rates towards a level at which they are no longer adding to demand. The central bank said its key interest rate, the official cash rate, would need to rise by about 2 percentage points in the next two years for inflation to remain near its target of 2% in the medium term.

Apple & Twitter Amongst Leaders As Tech Stocks Rise

Gains across the board lifted the tech sector on Wednesday with advances from Apple Inc and Twitter Inc. Apple rose 52 cents to close at $536.61 while Twitter rose almost 1% to close at $54.50, showing no ill effects from what the company called a “service issue” that shut down the messaging and information site for most of an hour on Tuesday. Microsoft Corp. edged up by 25 cents a share to close at $38.27. Late Tuesday, the world’s largest software company said it appointed ValueAct Capital president Mason Morfit to the Microsoft board of directors. Microsoft also declared its annual quarterly dividend payment of 28 cents a share, payable on June 12. King Digital Entertainment Plc also garnered attention as the maker of the popular “Candy Crush Saga” mobile phone game set a range of $21 to $24 a share for its upcoming IPO , which is expected in late March. The Nasdaq Composite Index ended the day with a gain of 16 points to close at 4,323.

That sums up today’s highlights! We hope you have a profitable day on the markets.

Just A Minute!

Here’s Wednesday’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the markets:

Main Trading Event Of The Day: NZD Official Cash Rate @ 20.00; RBNZ Monetary Policy Statement @ 20.00 GMT

WHAT WE’RE WATCHING TODAY

NZ Dollar Slips Ahead Of Reserve Bank Policy Review

The New Zealand dollar fell from a post-float high on a trade-weighted basis ahead of the Reserve Bank policy review, which is likely to kick off a tightening cycle with a rate hike. The trade-weighted index rose as high as 79.68, and was at 79.46 at 5pm in Wellington from 79.50 yesterday. The dollar traded at 84.64 US cents at 5pm from 84.61 cents at 8am, and down from 84.80 cents yesterday. Traders have priced in a 101% chance of a rate hike by Reserve Bank governor, Graeme Wheeler, which would lift the appeal of the dollar. Wheeler has previously signalled the official cash rate will have to rise from its record-low 2.5% to head of the threat of future inflation, and investors will be gauging the extent and pace of any future hikes. The central bank has kept OCR at 2.5% since March 2011. New Zealand’s relative economic strength has outperformed its peers, with neighbour Australia under pressure from weak Chinese trade weighing on iron ore and copper prices. Traders will be looking at Australian employment numbers to see how the economy is tracking. The New Zealand dollar rose to 94.48 Australian cents from 93.94 cents yesterday while the local currency fell to 87.20 yen from 87.57 yen and traded at 61.10 euro cents from 61.14 cents. Meanwhile, New Zealand stocks fell amid global concern over Chinese bond defaults and weakening economic data and ahead of the expected rise in interest rates from the central bank. The NZX 50 Index fell 5.407 points, or 0.1%, to 5096.530, the third straight decline. Within the index, 17 stocks fell, 18 rose and 15 were unchanged. Turnover was $133 million.

Gold Still Holding Onto Gains

Gold held on to overnight gains on Wednesday to trade near its highest in four months, as global uncertainty over economic growth and tensions in Ukraine increased the metal’s safe-haven appeal. Gold for April delivery rose another $11.70 to $1,358.40 an ounce. A day earlier, gold scored its second-straight advance as worries over Russia’s standoff in Ukraine and fears of a slowdown in China drew buyers to the perceived safety of the precious metal. Investors are closely watching how long gold will sustain its rally until there is a dramatic drop in prices amid easing tensions in Ukraine. It is expected that as long as uncertainty and fear exists about the situation, gold should continue to see gains. Copper has also been in focus this week due to its recent poor performance. The commodity is by far the worst performer among all precious and base metals, with a drop of almost 10% this year. On Wednesday, high-grade copper for May delivery remained flat at $2.95 a pound.

Bitcoin Coming To Wall Street

New York financial authorities confirmed on Tuesday that they would soon begin accepting applications for virtual currency exchanges including those dealing in bitcoins, in a sign of regulators’ growing interest in the technology. Approved applications will ultimately have to adhere to a proposed regulatory framework which will be developed by the end of June. Financial regulators in the state started looking at the use of Bitcoin and other virtual currencies last year. News of the regulations comes following the fall of Tokyo-based Mt. Gox, previously the largest exchange for buying and selling bitcoins which was most likely due to a hacking attack and mismanagement. This further demonstrates the urgent need for stronger oversight of virtual currency exchanges, including robust standards for consumer protection, cyber security, and anti-money laundering compliance. The brokerage industry’s own watchdog, FINRA, has warned that the lure of a potential quick profit should not blind investors to the virtual currency’s significant risks.

That sums up today’s highlights! We hope you have a profitable day on the markets.

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