Business Research & Insights

The AUD in November AUD/USD returned to ‘normal’ levels of monthly volatility in November.

After what has been a solid month for equities and bond investors, month end flows have probably play their part in the price action overnight, US equities have lost momentum, UST have led a rise in core global bond yields and the USD is stronger. US and European inflation releases favoured the notion the Fed and ECB are done with their respective tightening cycles.

Bond markets have been supported by some market-friendly data and while Fed speakers were again mixed, it was the more dovish remarks that captured attention.

Fed's Waller inches open the US rate cut door

US and European markets have begun the new week a subdued mood. But core global bond yields are showing some life, lower across the board while the USD is a tad softer too

The Aussie dollar came within kissing distance of 66 US cents on Friday

UK best Eurozone on the PMI front in Thanksgiving- thinned markets

Todays podcast   US data not supportive of Fed’s inflation quest US Jobless claims fall well below expectations Final U of Michigan inflation expectations revised up UST curve bear flattens. 2y up 6bps to 4.93% US equities ignore data and keep marching higher Oil slips on news OPEC + meeting delayed. Saudis not happy USD […]

The FOMC Minutes out 6am Sydney time didn’t do much to excite markets. The euro is a little weaker over the past 24 hours, while the equity market rally has lost some steam.

US equities start the new week in a positive mood, the USD has remained under pressure and after initially edging higher, longer dated UST yields edge lower supported by a well-received 20y Bond auction.

Another choppy night on bond markets with 10yr yields on net little changed and the curve twist flattening slightly.

A choppy session with softer-than expected second-tier US data seeing yields fall, while the USD gained smalls and commodity currencies underperformed

It was a busy 24 hours for data flow globally. Yields partially retraced yesterday’s post-CPI bond rally, while equities have held onto gains.

US CPI came in a tenth below consensus on both the headline and core rates, leaving yields sharply lower, the USD weaker, and equities higher.

Subdued start to the week ahead of US CPI tonight

US equities recorded a solid end to the week with the S&P 500 closing above the 4400 psychological mark. Equity investors showed little reaction to news of a downbeat consumer

Two events late in the session dominated price action. The first was a poorly received US 30yr Treasury auction. The second was not dovish comments by Powell who sounded still hawkish.

Oil prices down again as demand pessimism deepens

Quiet data wise, but some notable moves in markets.

It was a quiet start to the week for news flow, which was mostly reflected in market movements, though yields are generally higher.

Risk assets had a solid end to the week with softer US economic data releases fuelling the notion that the Fed is done with the current tightening cycle. Front end yields led a rally in UST yields while the USD extended its decline to a third consecutive day.

Risk-on continues in the wake of Wednesday’s FOMC meeting as investors price the aggressive monetary hiking cycle as being closer to the end.

The FOMC was on hold as expected. Yields are lower, though most of the moves came ahead of the Fed with soft US data.

Despite everything happening in the world, the AUD’s October trading range was extraordinarily low.

Japanese Yen slumps after only minor BoJ policy tweaks

Risk sentiment started the week on firmer footing. Equities are higher, the US dollar is lower, and US yields were higher. Brent oil lost 3%, back below $88 a barrel.

European and US equities ended the week with a cautious tone. The S&P 500 extended its weekly decline to 2.53% and entering correction territory in the process. Weekend news that Israel has begun a ground invasion of Gaza suggest markets are likely to retain a cautious tone at the start of the new week.

Risk sentiment remained fragile overnight with equities extending recent losses with disappointing earnings outlooks from major tech companies, despite mostly beating on current quarter earnings.

US equities are lower led by the tech heavy NASDAQ index and not helped by a new surge in UST yields. The USD extended yesterday’s gains with the AUD at the bottom of the G10 board, reversing its post CPI gains.

Weaker European PMIs, and potentially some unwind of yesterday’s move, have seen a stronger US dollar the main mover overnight, up 0.7% on the DXY.

A quiet night for data, but a big night for bonds.

Close but no cigar – US 10 year bonds traded to as high as 4.99% on Friday

Fed Chair Powell’s remarks have seen a choppy market response and a steeper curve, but against a backdrop of weak risk sentiment

Higher US yields and 'risk-off' tone see AUD's hard-fought gains undone

Strong US retail sales sees yields rocket – 10yr yield +14bps to 4.84%

Todays podcast Positive risk appetite to kick off the new week Equities higher, S&P500 +1.1% Yields higher, US 10yr +9bp to 4.70% Dollar loses 0.4% on the DXY with AUD an outperformer, +0.8% to 0.6344 Coming up: NZ CPI, RBA Minutes, US Retail, CA CPI, UK Wages, FED & ECB speakers Events round-up NZ: Performance […]

US CPI reverses much of the earlier week market moves

Global markets were relatively stable overnight ahead of tonight’s key risk event of US CPI.

Lower US bond yields and softer US dollar lift AUD back above 0.64

Reaction to the Israel-Hamas conflict triggers a spike in energy prices while German Bunds lead a rally in European bonds with US Treasury futures also pointing to a decline in US Treasury yields. Not all the initial moves have been sustained. The USD is little changed, AUD is up, after being down with Fed speakers favouring holding rather than hiking rates, helping US equities rally while European shares fall.

Stronger than expected payrolls data initially saw yields sharply higher, equities lower, and the USD stronger, though with the unemployment rate steady and earnings growth moderating, those moves were retraced.

Markets mark time ahead of payrolls tonight. Core global yields trade in narrow ranges, the USD loses a bit of altitude while US equities end the day little changed.

The bond sell-off that dominated the early part of the week has been put on pause. Why? NAB’s Taylor Nugent says there are a number of factors, but it’s tomorrow’s non-farm payrolls that will really set the direction for early next week.

A better-than-expected US JOLT report provided rattled markets. US Treasuries led a rise in core global bond yields, equities traded lower and the USD was stronger. USD/JPY gapped lower ( official intervention?) and AUD was the notable underperformer.

The AUD/USD’s 1.9 cents range in September was the narrowest since the 1.74 cents October 2019 range. Still, the USD was in the driving seat, fuelled by “higher for longer” Fed messaging.

The sell-off in global bonds continued with fresh cycle highs being set for longer-term yields. The

Todays Podcast UK gilts lead global bond yields higher, Italy and France also up a lot, budget news hurts Treasuries recoil ~10bps from new (4.685%) high ahead of expected government shutdown tomorrow This plus reduced UAW pay demands, news of possible Xi-Biden meet, boosts US equity sentiment, AUD/USD recovers more than 1% of recent losses […]

It’s the same story again today – equities hurting, the US dollar higher and bond yields reaching 16 hear highs. What’s changed today is a sharp rise in oil prices. NAB’s Tapas Strickland says there’s a great deal of nervousness that supplies in the US have been destocked too far, down to levels last seen in 2014

US equity and FX markets have for once pushed the bond market vigilantes out of the spotlight, albeit the weakness in stocks and strength in the USD doubtless owes something to the lagged impact of the earlier run up in Treasury yields to post 2007 highs

The bond selloff continued overnight in what was a very quiet night for newsflow. The US 10yr hit a 16yr high of 4.55%, now 4.53%, and up some 11.2bps over the past 24 hours.