By Dan Bell
The NZD/USD opens at 0.7530 this morning- off recent highs around 0.7650 as European debt woes continue to weigh on market sentiment.
It was ‘risk off’ across the board overnight. The EUR/USD fell to fresh 2 year lows under 1.24. Spain's stock market hit a nine-year low as the country's borrowing costs rose near 7% - the same level that had forced other euro zone nations to seek bailouts.
US Treasury Yields to 1.6288% - the lowest since the 1940s and Germany’s two year government bond yields reached zero as investors bail out of risk assets and into safe haven government bonds.
Adding to risk off theme was the latest Greek election poll showing anti-bailout SYRIZA regaining the lead against pro-bailout New Democrat.
Stocks have been hammered with most European equities down 2%+. US markets are down over 1.2% and oil prices down 3.6%.
Sentiment received a short term boost after the European Commission said the euro zone should move to a banking union and consider directly recapitalising banks from its permanent bailout fund.
"A closer integration among the euro area countries in supervisory structures and practices, in cross-border crisis management and burden sharing, towards a "banking union", would be an important complement to the current structure" of Europe's economic and monetary union, the Commission said.
The NZD opens at 0.7760 AUD, 0.6080 EUR, 0.4865 GBP and 59.50 JPY.
From NZ the focus will be on NBNZ Business Confidence numbers this afternoon.
From Australia we get Building Approvals and Private Capital Expenditure numbers.
Tonight we get ADP Employment Numbers from the US- seen as a precursor to the official Non Farm Payrolls on Friday night.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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