NZD dips sharply, down 1c overnight

Better than expected US jobs numbers sees a US rally, US Treasury yields climb

Currencies

Better than expected US jobs numbers sees a US rally, US Treasury yields climb

6th Jul 13, 7:53am by David Chaston

The New Zealand dollar has fallen sharply this morning and is currently down to 77.1 USc.

At one point it was below 77 USc.

Better than expected jobs data out of the US saw the American currency gain on the news. Their unemployment rate was unchanged however.

The oil price has stayed high on the combination of tensions in Egypt, and low US inventories ahead of their driving season.

The improving employment situation has markets more convinced the Fed will start it's tapering shift sooner.

Yields on US Treasuries rose, with the 10yr yielding its highest in two years.

Gold however has fallen on the jobs data, now down to US$1,220 in late trade, off US$20 on the day.

The NZ dollar is now trading at 85.1 AUc.

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14 Comments

by andyh | 6th Jul 13, 9:25am 1373059510

Oil up another 2%, DESPITE a rise in the US$. I suspect next week we will see NZ petrol hit an all time high, and its up about 6% in a few months. Increases in petrol send cascading inflationary effects through the economy, so lets see how long those RBNZ inflation figures stay 'benign' shall we.

By the way a) Egypt is a net importer of oil and b) the Suez canal tranships only about 5% of global oil so these claims that it is the Egyptian situation that is causing oil's strength seem rather trite. Clearly it is all that vast new supply of fracked oil onto the market that is forcing the price up.

by Ergophobia | 6th Jul 13, 11:36am 1373067392

Andy, Agreed re inflation. But there will be some offset; oil is NZ's 4th most valuable export. The tankers, nth & sth, must wave at each other as they pass in the Pacific.

Regards, Ergophobia

by steven | 6th Jul 13, 2:39pm 1373078340

The offset is negligable.

by steven | 6th Jul 13, 2:44pm 1373078685

Inflation will stay benign because ppl have no more money, so extra on petrol == less on something else.

regards

by Stephen Hulme | 6th Jul 13, 3:15pm 1373080553

Depends which methodology is empowered to disseminate such information.

by Craig Simpson | 6th Jul 13, 4:27pm 1373084843

Petrol price at the pump for 91 is already at highest point as noted in David C's 90@9 last week.

Check out the petrol graph on the site here

http://www.interest.co.nz/charts/commodities/oil-and-petrol

by Stephaniep | 6th Jul 13, 9:36am 1373060197

NZRB circus skills. Keeping Fontera happy + interest rates low whilst sitting on a bubble. Lets see how this goes for us.

by bigblue | 6th Jul 13, 9:41am 1373060470

Saw an item on CNBC indicating USA will become self sufficent on the oil and energy front!

by andyh | 6th Jul 13, 9:45am 1373060732

Well it must be true then, and it clearly explains why the cost of West Texas Intermediate crude continues to fall towards $50.

by steven | 6th Jul 13, 2:46pm 1373078770

Tis wrong, shale oil has a price of $114 a barrel and WTI is right now about $104...so $10 loss on every barrel.

Thats one neat way to become self-sufficient alright.

regards

by Stephen Hulme | 6th Jul 13, 10:24am 1373063049

Yields on US Treasuries rose, with the 10yr yielding its highest in two years

Yep, The US T10 close before Independence day was 2.50%. Now up 24 bps @ 2.74%

These are serious loss making moves for the "risk on" advocates, it would pay to err on the side of necessity - capital proctection. Read more

The job numbers weren't that flash - but certainly indicated the under employed (u6) will seek greater Federal care.

by Wolly | 6th Jul 13, 12:02pm 1373068924

Go here to learn the truth about US job numbers!

http://globaleconomicanalysis.blogspot.co.nz/

by steven | 6th Jul 13, 2:38pm 1373078308

moved

by Your Landlord | 6th Jul 13, 4:50pm 1373086206

Good to see petrol prices rising.

The higher the price the less the traffic on the roads, making for much less congestion.