Good morning
It was, as I’d expected, a reasonably quiet day yesterday which saw little in the way of movement, save for GBP moving a touch lower against both USD and EUR (lows of 1.3060 and 1.0905), now 1.3085 and 1.0985. The commodity currencies, AUD, NZD and CAD also lost ground, weakening even against the slightly beleaguered GBP, trading to 1.9360, 2.1365 and 1.7805.
China markets returned after their week or so long holidays, buoyed for sure by the stimulus plans and the hope of further actions. Chinese equities were up around 10% at one point, looking for the National Development and Reform Commission to announce some additional measures, however with no concrete plans announced equities fell back. Chinese stocks were still in the black, Shanghai Comp and CSI 300 up 4% and 5.2% respectively, but well off the highs of around 10% up. Hong Kong’s Hang Seng suffered more, down around 7% although it had been down 10% at one stage.
AUD slipped lower still as NRDC failed to announce any new measures. GBPAUD moved up to near 1.9500 overnight, now 1.9440, while AUDNZD fell back below 1.1000. Mildly dovish RBA minutes offered little support to AUD although they did make it clear that the difficult job of bringing down inflation was not yet over.
Florida is braced for what looks like another catastrophic hurricane (Milton) that is forecast to make landfall some time tomorrow. After the recent damage from Helene, and with mass evacuations in place and further widespread damage expected, there is some question over whether residents in the region will be in a position to vote in the US elections in just under a month.
Israel continues its offensive against Hamas and Hezbollah, one year after the Hamas attacks. We have not yet seen any retaliation from Israel over the recent attacks by Iran. Therer are some reports suggesting an Israeli attack is imminent but I am sure the likes of US are urging Israel to hold off. I have to admit I do get the feeling that the two major Iranian attacks on Israel have been more for show than anything and Israel would do well to just let these pass. They have enough on their plate for the time being.
If we thought yesterday’s calendar was sparse, todays is empty, save for some central bank speakers after the London close. The key data will be the RBNZ rate announcement overnight, still looking for a 50bps cut. What happens to NZD depends greatly on the size of the actual cut of course, but also the tone of the statement. We could get a 50bps cut and a ‘we’re not done yet and think further cuts are necessary’ on perhaps a 50bps cut with a ‘further cuts won’t be as big’. There is some chance we get a smaller cut, I’m not banking on that but if it did happen I’d think NZD would push higher but again a lot will depend on the tone of the statement. Nothing is ever as straightforward as we’d hope.
Have a great day
- 17.45 Feds Bostic speaks
- 18.00 ECBs Nagel speaks
- 23.30 Feds Jefferson speaks
- 00.30 AUS Westpac consumer confidence
- 02.00 RBNZ rate announcement
- 05.30 RBI rate announcement
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