Here's my summary of the key issues that affect New Zealand overnight with news of more pre-ECB positioning.
In Denmark, their central bank has delivered a surprise rate cut overnight to prevent the krone gaining further. And tried to quash speculation it may follow Switzerland and abandon its euro peg, saying it has the tools to defend its peg to the euro. This is all part of the preparations for the ECB's big announcement on Friday (our time) which is thought to involve bond buying up to €550 bln. (In the New Zealand context, that is a bit more than the value of all New Zealand houses.)
Some see Denmark being the next EU country to cause currency chaos.
Markets in New York are mostly closed for a public holiday (Martin Luther King Day.)
The other EU stress point is nearing a result with the Greek election expected to deliver a parliament opposed to their bail-out terms. Grexit is likely. Results will be available on Monday.
In Australia, ANZ is preparing to sell off its giant Esanda vehicle and equipment asset lender. Where that will leave their New Zealand UDC is unsure, although UDC is not part of the Esanda move. But no doubt the Melbourne thinking that is driving the Esanda changes will dominate how ANZ sees UDC.
In New York, benchmark UST 10 year bond yields inched up again but only to 1.83%. Yesterday, New Zealand swap rates remained remarkably flat despite rising a few basis points across the whole curve.
The oil price has stayed low erasing the excitement of last weeks small gains. It is now in the mid US$47/barrel range while Brent crude in the mid US$48/barrel range.
This as close as the two benchmarks have been for a very long time and comes as the Iraqis report record output.
The Saudi's seem to expect low oil prices for 'at least eight years'. Iran says they could withstand a US$25/bbl price.
The gold price is holding its higher level and is now at US$1,273/oz.
We start today with the New Zealand dollar at 77.7 USc, at 94.7 AUc and the TWI is at 79.7.
Later in the morning we will get the important NZIER quarterly survey of business opinion, to be followed this afternoon by Chinese GDP for the December quarter. Both are important releases.
If you want to catch up with all the changes yesterday we have an update here.
The easiest place to stay up with event risk is by following our Economic Calendar here »
Daily exchange rates
Select chart tabs
11 Comments
Heaven help us if that came to pass. The unified Euro currency is one of the biggest problems that Europe and the world faces. (The balancing effect of changing currency rates between different nations is lost.) Apply this model world wide and there would be utter mayhem in my opinion.
However given the idiots who seem to be running the world at the moment anything is possible so you may be right.
Does a 7.7% SHANGHAI COMPOSITE collapse warrant a mention in dispatches? Read more
Despite the sharp fall, the Shanghai Composite Index is still up 55 percent in the past 12 months and up 33 percent for the past three months.
http://abcnews.go.com/International/wireStory/qa-chinas-stock-market-pl…well with WMP volumes offered being reduced this and announced for the next few months, it wouldn't be for the want of trying....
from last week (see the video)
the dairy companies are being encouraged by govt. to buy local..
Interest rates up (must be news no?)
https://nzx.com/files/attachments/206481.pdf
shares at $5.90
https://nzx.com/markets/NZZX/securities/FCG?icharts=true
not the result we were looking for
https://www.globaldairytrade.info/en/product-results/
Event 132 20 January 2015 CHANGE IN GDT PRICE INDEXFROM PREVIOUS EVENT + 1.0 % AVERAGE PRICE (USD/MT, FAS)
US$3,500 still away away.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.