APAC Morning Update - 08/03/2021

The NZDUSD opens at 0.7160 and the AUDUSD opens at 0.7689.

The NZD and the AUD lost ground against the USD on Friday after the US job data showed jobs growth beat expectations in February, backing up the view of Fed officials who have said that the recent spike in bond yields is justified by an improving economic outlook in the States.

Job improvement came amid falling new COVID numbers, quickening vaccination rates and added to that, relief money from the Government, which has put the labour market recovery back on firmer footing for the months ahead.

The NZD has come off its highs at the end of February of 0.7464, so this is a significant downward move based on higher bond yields and a stronger USD.

RBNZ and NZ Wholesale rates:

The RBNZ announced an increase in its bond buying from $570 mill to $630 mill as of this week, attempting to further stimulate an economy that has been stalled by the Auckland lockdown.

NZ Wholesale rates are back near their 18 month highs, with the 10 year swap rate closing the week at 2.07%, with NZ rates responding to the global yield hike.


Equity Markets:

Equity markets initially came under pressure from the increase in treasury yields, before staging a recovery with the stabilisation of the bond market. Investors have been supported over the last year by a strong stimulus backed equity market, but have been disappointed that Fed chair Powell didn’t push back more forcefully against the rise in yields in a mid-week interview.

Data this week:

There is very little NZ data out this week with just the ANZ business survey on Tuesday.

In Australia, RBA Governor Lowe is speaking about the recovery/investment and monetary policy, and we have US CPI on Wednesday night.

Global equity markets are well off: Dow +1.9%, S&P 500 +2.0%, FTSE -0.3%, DAX -1.0%, CAC -0.8%, Nikkei -0.2%, Shanghai +0.0%.


AUDUSD 0.7689 -0.6%
AUDEUR 0.6453 -0.1%
AUDGBP 0.5556 -0.1%
AUDJPY 83.31 -0.1%
AUDNZD 1.0732 -0.1%
GBPAUD 1.7998 0.1%

NZDUSD 0.7160 -0.4%
NZDEUR 0.6010 0.1%
NZDGBP 0.5175 0.1%
NZDJPY 77.61 0.1%
NZDAUD 0.9318 0.2%
NZDCAD 0.9066 -0.4%
GBPNZD 1.9324 -0.1%