A sharp uptick in global risk aversion yesterday morning resulting in the NZDUSD being sold to a 0.6444 low. US equity markets plunged and this negative sentiment spread around the global equity markets, with the NZX being no exception.
The NZDUSD rebounded overnight, as the USD fell on weaker than forecast US consumer inflation figures and lower US treasury yields – calling into question the number of US Fed rate hikes for 2019.
US equity markets have suffered further losses during today’s trading session, although they appear to be staging a late rally to moderate losses.
The GBP rose again on hopes of a near-term Brexit deal being agreed.
Gold prices rose over 2% as sliding global equity markets caused a ‘safe-haven’ demand for the yellow metal.
International Monetary Fund (IMF) Managing Director Christine Lagarde warned nations against engaging in trade and currency wars that damage global growth, and urged countries to “de-escalate” trade conflicts and improve global trade riles instead of abandoning them.
The domestic calendar has Business NZ Manufacturing Index scheduled for 9:30am. Tonight brings US Consumer Sentiment, Inflation Expectations, and some Fed-speak. However, most interest will be on whether US equity markets continue to slide for a 7th consecutive day.
Global equity markets were mixed on the day - Dow -1.7%, S&P 500 -1.6%, FTSE -1.9%, DAX -1.5%, CAC -1.9%, Nikkei -3.9%, Shanghai -5.2%.
Gold prices are slipped 0.2% to USD$1,199 an ounce, while WTI Crude Oil prices were flat at US$70.80 per barrel.