Tag Archives: NZD

U.S. Jobless Claims Likely To Remain Low

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: U.S. Unemployment Claims @ 12.30 GMT

WHAT WE’RE WATCHING TODAY

Jobless Claims Likely To Remain Low Reflecting Improved Labour Market

The U.S. economy is adding jobs at the fastest pace in years and layoffs remain extremely low so the latest weekly report on jobless claims is unlikely to show any deviation in those trends. Economists are projecting initial claims will rise to 320,000 in the seven days ended July 5 from 315,000 in the prior week. The number of people filing new applications for unemployment benefits each week has ranged between 298,000 and 327,000 since early May, keeping claims at or near a post-recession low. It is worth bearing in mind that the claims figures for July can, however, be tricky to evaluate since it’s one of the most volatile months of the year. The July 4 holiday can also skew the report while some major manufacturers such as car makers often retool plants in midsummer. The retooling sometimes leads to a temporary bump in applications for benefits, though auto makers may be less inclined to shut down this year amid surging demand for new vehicles.

U.S. Unemployment Claims today @ 12.30 GMT.

Europe Stocks Higher On Fed Meeting Minutes

European stocks are expected to open higher today after traders were reassured that the U.S. Federal Reserve will move slowly to raise interest rates. The FTSE is expected to open 4 points higher, the DAX 16 points higher and the CAC 40 up 5 points. The minutes from the Federal Reserve’s Open Market Committee suggested its asset-buying program, also known as quantitative easing, will likely end in October. U.S. markets showed measured reaction to the news, with stocks adding to modest gains and government bond yields slightly lower after the two-year note momentarily touched a three-year high. In Asia, stocks traded mixed following weak Chinese trade data. Exports rose 7.2 percent on year, missing estimates for a 10.6 percent increase. Imports rose 5.5 percent, against expectations for a 5.8 percent increase, leaving the country with a $31.6 billion trade surplus. The Bank of England is also scheduled to release its latest monetary policy decision today and is expected to leave rates on hold at a record low of 0.5 percent.

The New Zealand Dollar Continues To Shine

The NZD was trading around $0.8820 today, just short of its post float all-time high of $0.8842 hit on August 1 2011, boosted by the move by credit rating agency Fitch to reaffirm the country’s AA rating and upgrade its outlook to positive from stable on Tuesday. The NZD has been on fire since mid-2013 and looks unstoppable according to analysts. As one of the only two currencies with any appreciable yield in the advanced industrialised world, the kiwi has been the darling of the yield chasers and the upgrade by Fitch will only serve to reinforce its strength. New Zealand raised interest rates three times this year to reach 3.25 percent. It is the only developed economy tightening monetary policy. Many analysts expect a fourth rate hike this month, and the central bank pledged earlier this year to raise rates by 225 basis points over the next two years. The country’s hawkish monetary policy and strong economic fundamentals helped fuel its 14 percent rise against the dollar since mid-last year, while investors’ hunger for high yielding currencies also contributed to strength. Although some analysts flagged the possibility that currency strength could make New Zealand’s exports less attractive, most agree that the bank is unlikely to change course on its monetary policy. Much of the strength in the kiwi comes from the low volatility, yield seeking environment.

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U.S. Dollar Falls After Fed More Dovish Than Expected; NZ Dollar Soars

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: UK Retail Sales @ 08.30 GMT

WHAT WE’RE WATCHING TODAY

U.S. Dollar Falls After Fed More Dovish Than Expected; NZ Dollar Soars

The U.S. dollar fell to its lowest in nearly two weeks against a basket of major currencies after the Federal Reserve hinted at yesterday’s meetings that U.S. interest rates will stay low for a while. The latest economic projections suggested that the Fed sees rates rising more in 2015 and 2016 than it had previously forecast, but officials lowered their long-term rate target. The Fed also sounded comfortable with the inflation outlook despite recent signs of a pick-up in price pressure. After the meetings, the dollar slipped 0.3 percent on the day to 80.378, and fell as far as 80.353, a level not seen since June 9. Against the yen, the greenback was almost flat on the day at 101.91 JPY, down from a one-week high of 102.38 yen hit on Wednesday before the Fed’s announcement, while the euro was slightly lower at $1.3589 after it touched $1.3600 EUR on Wednesday. The Fed cut its monthly bond buying program by a further $10 billion to $35 billion in a widely expected move and expressed confidence that the economic recovery remained on track.

The New Zealand dollar soared to a record high against a basket of currencies after the Fed’s dovish stance, rallying nearly 1 percent to hover around six-week highs of $0.8736 NZD. The outlook for higher New Zealand interest rates was reinforced by data showing the economy grew a solid 1.0 percent in the first quarter from the previous quarter, a result that cemented New Zealand as one of the fastest-growing developed economies. The Australian dollar was steady on the day at $0.9404 AUD, having gained 0.7 percent on Wednesday.

Eurozone: Is Deflation On The Horizon?

Professional services firm EY has warned that although the euro zone economy is set to grow in 2014, the threat of looming deflation in the region persists. The region will grow 1.1 percent this year, according to EY’s forecasts, followed by expansion of 1.5 percent in 2015. Growth is seen picking up pace between 2016 and 2018. Strengthening exports and a pickup in domestic demand will drive a return to modest investment growth but the recovery is likely to be felt more in some countries than others. The threat of deflation has been a key issue in European policymakers’ minds in recent months. The European Central Bank (ECB) announced measures to tackle the issue at its most recent policy meeting, including imposing a negative interest rates on banks for their deposits. Inflation in the euro zone rose by just 0.5 percent in the year in May, significantly below the ECB’s target of 2 percent. The inflation slowdown has been due to lower energy costs and increasing euro strength and there are now real concerns that inflation could turn to deflation, as firms start to bid down prices and wages in order to compete for orders. Deflationary pressures could have a knock on effect on consumer spending, just as confidence was starting to build. Exporters may also be in for another tough year as the euro remains stubbornly strong. The euro is currently trading around $1.35 against the dollar, down from peaks of $1.39 earlier in the year.

Emerging Markets: The Asset Class Of Choice?

Analysts are predicting that increasing comfort with the outlook for China’s economy will make emerging market equities the best performing asset class in the second half of 2014. Recent Chinese economic data indicates a stabilisation in the world’s second-largest economy, assisted by targeted stimulus measures. This is positive for emerging markets, many of which are dependent on exports to the mainland. May retail sales, for example, rose 12.5 percent on year, above analyst expectations for a 12.1 percent increase. While fixed asset investment rose 17.2 percent on year for the January-to-May period, just above expectations for a 17.1 percent rise. Emerging markets equities are up 3.9 percent year to date, slightly underperforming global stocks which have risen 4.1 percent, according to the MSCI Emerging Markets and MSCI World indices. India and Southeast Asian markets have been the biggest beneficiaries. Markets that were battered into 2013 are seeing a revival because of good policy from the central banks and economic momentum is not as poor as initially thought. Strategists at Coutts Investment Office, agree that emerging markets are the place to be.

That sums up today’s highlights! Remember you can keep in touch with us throughout the day via Facebook, Twitter, Google+ and LinkedIn for all the latest trading news. We hope you have a profitable day on the markets.

Oil Prices Increase As Iraq Tensions Brew

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: U.S. Unemployment Claims @ 12.30 GMT

WHAT WE’RE WATCHING TODAY

Oil Prices Increase As Iraq Tensions Brew

Surging U.S. oil production was expected to drive oil prices lower this year, but a number of geopolitical events, in particular, a Sunni militant uprising in Iraq could now drive already high prices even higher and keep them there. Citigroup raised its price forecast for Brent crude several weeks ago to an average $109 per barrel this year, and $105 for next year, based on a cluster of geopolitical events. Crude prices have been trading near 52-week highs. Brent was up slightly Wednesday, hovering at $110 per barrel. West Texas Intermediate has been moving higher with it, closing at $104.40 per barrel on Wednesday. Outages in Libya, the ongoing boycott against Iranian crude and security concerns in Nigeria are all adding to worry that global oil supplies could become tighter. Russia’s foray into Ukraine also has added slightly to the price premium since it is a major source of oil to Europe. Another factor driving prices is China’s growing demand for oil. But at the same time, U.S. oil production continues to surge. The latest U.S. government data, released Wednesday, shows domestic oil production rose to 8.46 million barrels a day last week, up from 7.2 million barrels at the same time last year and 8.38 million barrels just a week earlier. So far, with OPEC pumping 30 million barrels a day and the U.S. producing more oil now than it imports, prices have risen but not spiked on fears about Iraq. However, this could be set to change.

RBNZ Signals Further Tightening After Third Rate Rise

New Zealand’s central bank raised interest rates for the third time this year and signaled more tightening to come. The dollar surged jumping from 1.2 percent to 86.47 U.S. cents in Tokyo and headed for its biggest daily gain in four months. The kiwi rallied at least 1 percent versus all of its 31 major counterparts as Reserve Bank of New Zealand Governor Graeme Wheeler said it was important to contain inflation expectations. New Zealand’s central bank boosted its official cash rate by a quarter-percentage point to 3.25 percent. Wheeler is the first central banker from a developed nation to raise official interest rates this year, fueling gains in the nation’s currency. Wheeler added that “the bank does not believe the exchange rate is sustainable at current levels. The exchange rate has not yet adjusted to weakening commodity prices, but is expected to do so.”

Gold Holds Near Two-Week High

Gold held near the highest level in two weeks as a rally in equities faltered, boosting demand for alternative investments. Gold for immediate delivery was at $1,261.12 an ounce yesterday. The metal yesterday climbed to $1,265.32, the highest level since May 28, as the Dow Jones Industrial Average halted a five-day advance after the World Bank cut its forecast for global growth. While gold has seen a bit of bounce, the outlook for prices remains negative as U.S. economic data continues to improve, supporting strength in the stock markets and tapering. Bullion sank 28 percent in 2013 to end a 12-year bull run on speculation the Fed will trim asset purchases used to fuel growth as the economy recovers.

That sums up today’s highlights! Don’t forget to keep updated on all today’s trading events via Facebook, Twitter, Google+ and LinkedIn. We hope you have a profitable day on the markets.

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.

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