The strongest to the weakest of the major currencies

The NZD is the strongest and the AUD is the weakest as the NA session begins. The USD is mixed with some modest corrective action in markets. Yesterday, US stocks tumbled and yields soared as inflation fears kicked higher. The S&P Global PMI data came in stronger than expected. Fed's Bullard reiterated his view that the Fed should move rates to 5.25% to 5.50% range with the best path being the shortest (i.e., hike by 50 bps). The comments are in line with his recent views.

US mortgage applications fell -13.3% today after a -7.7% decline last week. The 30 year mortgage rate surged to 6.62% from 6.39% last week.

US 30 year mortgage
US 30 year mortgage

In New Zealand, the Reserve Bank of New Zealand raise rates by 50 basis points and was more hawkish in their tilt:

  • Too early to determine impact of Cyclone Gabrielle
  • Prices for some goods are likely to spike in the weeks ahead
  • Still forecasting a recession 9 to 12 months period
  • Demand needs to slow significantly
  • Very little discussion of a 25bp rate hike, most focus was on 50bp

Meanwhile in Australia, the AUD moved lower after softer wage data for the quarter. The AUDNZD fell -0.63% and is the biggest mover so far today. Looking at the 4-hour chart of the pair, the price has moved back below its 100 hour MA at 1.0974. Last week, the pair tested that MA only to find willing buyers (see blue line on the chart below) against it. Stay below the 100 bar MA now would keep the bears more in control with the 200 bar MA at 1.09203 and the 100 day MA at 1.0886 as the next downside targets on more selling momentum.

AUDNZD falls below the 100 hour MA

In other markets:

  • spot gold is trading at $4.37 or 0.24% at $1839.19.
  • Spot silver is trading up three cents or 0.15% at $21.86.
  • WTI crude oil is trading down $0.45 at $75.91
  • Natural gas is trading at $2.03 down four cents or -1.93%. The price has moved to the lowest level since September 2020
  • Bitcoin is trading at $24,153 after trading as low as $23,871 and as high as $24,474 today

Overall US equity prices are rebounding after yesterday's rout to the downside saw the major indices have their worst day in 2023. The features are implying

In the European stock market , the major indices are lower as a catch up to the afternoon declines in US equity prices

  • German DAX down -0.14%
  • France's CAC down -0.28%
  • UK's FTSE 100 down -0.79%
  • Spain's Ibex down -0.81%

In the Asian Pacific market today:

  • Japan’s Nikkei 225 -1.34%

  • China’s Shanghai Composite -0.47%

  • Hong Kong’s Hang Seng -0.51%

  • Australia’s S&P/ASX 200 -0.3%

In the US debt market, the yields are correcting some of the gains from yesterday and are trading lower. The the run higher yesterday took some of yields up double digits (5 year yield was up 10.2 basis points while the 10 year yield was up 11.2 basis points). The U.S. Treasury will auction off five year notes at 1 PM ET:

US yields
US yields are lower across the board
10 year yields
European 10 year yields