There is not a lot of news to report and trading volumes are light ahead of the Easter holidays. US-Russia relations remain in the spotlight as US Secretary of State Tillerson met with Russian officials in Moscow, with seemingly no agreement over Syria and a general lack of trust about each other’s intentions. Before the meeting President Putin said that relations with the US had worsened under Trump. North Korea also remains a focus, with President Xi and Trump conversing via the phone after Trump stepped up his aggressive tone towards North Korea.
With that backdrop, risk appetite continues to sour and the VIX index has reached fresh highs for the year, trading within 15-16, well up from around 12 before the US bombed a Syrian airfield last Friday. The S&P500 is currently down about 0.3%.
While currency movements have been modest, the NZD stands out as the clear underperformer, followed by the AUD. The NZD is down about 0.3-0.7% on all the crosses, with NZD/USD close to its lows for the session just below 0.6915.
NZD/AUD is slightly lower at around 0.9250 even as another big fall in iron ore prices makes the AUD less attractive. The Qingdao measure fell 8.5% to $68, taking the fall over the past week to 16.5% and the fall over the past month or so to 26%. Meanwhile dairy prices have sustained their recent recovery ahead of ex-tropical Cyclone Cook, which is expected to dump more heavy rain on already sodden paddocks in the North Island.
The CAD has outperformed, as the Bank of Canada removed its easing bias. With the economy expected to return more quickly to full capacity, Governor Poloz said that a rate cut was “not on the table at this time” and “we’re decidedly neutral”. On a day where currency movements (other NZD) have been modest, the CAD is about 0.2% stronger against the USD and NZD/CAD is down 0.7%, close to 0.92.
There is nothing to add on the other currencies, with EUR, GBP and EUR all pretty flat against the USD.
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