Tag Archives: Employment / Unemployment Data / Policy

Australia, NZ dlrs at the highest levels due to yields, commodities reached their peak | Instant News


SYDNEY, Feb 25 (Reuters) – The Australian and New Zealand dollars rose to multi-year peaks on Thursday as the global rush into a reflex game swung commodity prices and bond yields sharply in their favor.

The Aussie is enjoying cleared air at $ 0.7960, having hit an unvisited high since early 2018 of $ 0.7979. It is up 1.2% on the week as momentum funds pile up on the break of major chart barriers, particularly against the yen and euro.

The next targets are the psychological 80 cents level and the January 2018 peak of $ 0.8136.

The kiwi dollar rose to $ 0.7430, clearing 2018 peaks to hit levels not seen since August 2017. The next major target is the all-year 2017 peak of $ 0.7557, and a break there will take it to levels last visited in mid 2015.

“For Australia, the combination of rising commodity prices and viable export volumes means that resource-related export revenues have been healthy,” said CBA Australia’s chief economist, Gareth Aird.

“Prices are expected to remain high and that will produce a large sustainable trade surplus which will support the Australian dollar.”

Miners have already paid bumper tax and dividends in Australia, so convert the US dollars earned into Australian dollars.

The reflective trading has combined with upbeat economic data at home to drive the big gains in bond yields far beyond those seen in the US.

Australia’s 10-year yield surged up to 1.705%, the highest since May last year and surged 29 basis points this week alone. The spread on Treasuries expanded to 30 basis points, from zero a few weeks ago.

The Reserve Bank of Australia (RBA) stepped in on Thursday to buy A $ 3 billion in 2023-2024 bonds aimed at stopping the three-year yield from rising further above its 0.10% target.

It had limited success dragging the three-year yield to 0.14%, from a high of 0.168%.

In New Zealand, the 10-year yield has rocketed 33 basis points so far this week to hit 1.865%, the biggest weekly gain since 2013.

The Reserve Bank of New Zealand (RBNZ) on Wednesday pledged to be patient on policy and not tighten for some time, although noting that global moves in yields were beyond its control.

The country’s government has also recently mandated the RBNZ’s payroll account for house prices when setting policy, a tricky task given the record low prices have seen prices soar in recent months. (Reporting by Wayne Cole; Editing by Christopher Cushing)

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Australia, the New Zealand dollar hovers near multi-year highs amid a commodity boom | Instant News


SYDNEY, Feb 23 (Reuters) – The Australian and New Zealand dollars were little changed on Tuesday, hovering near multi-year highs amid surging commodity prices and a weak dollar, while bond yields were steady.

The Aussie dollar is up 0.14% higher at $ 0.7925 after crossing the $ 0.79 mark for the first time since early 2018 the previous day. The currency’s next target is $ 0.80, said the strategist.

The kiwi dollar fell 0.05% against the greenback to $ 0.7324, having stretched as far as $ 0.7343 in the previous session, the highest since April 2018, as yields surged and S&P upgraded New Zealand’s rating to AA +, citing surprising strength from the economy.

Rising prices for materials from oil and copper to wood and powdered milk have pushed currencies such as the Australian and New Zealand dollars to their highest levels in nearly three years.

Copper prices surged above $ 9,000 per tonne for the first time since 2011 on Monday, while nickel traded above $ 20,000 per tonne for the first time since 2014.

“Dividend announcements for Australian mining companies that are likely to declare in US $ and offer payouts in A $, and the prospect of a larger dividend at the end of the year adds to the A $ demand story,” Westpac analysts said in a note.

The ten-year bond yield in Australia fell four basis points to 1.55% on Tuesday after rising sharply in recent days as fears of faster global inflation have hit bond markets.

The three-year bond is up 2 ticks to 99.7550, and the 10-year bond is up 4 ticks 98.4350.

In New Zealand, the 10-year yield was up one basis point at 1.65%, after hitting 1.72%, the highest since March 23 as markets await this year’s first monetary policy meeting on February 24.

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Australian stocks traded flat as a tech slump offset commodity gains | Instant News


* Tech stocks observe their worst day in nearly a month

* Energy stock is set for the best day in nearly six weeks

* Mining stocks hit their highest level since January 8

* NZ is set for the fourth consecutive losing session

February 23 (Reuters) – Australian stocks traded little changed on Tuesday as gains in miners and energy companies in stronger commodity prices battled losses in technology stocks following weak hints from US peers.

The S & P / ASX 200 index was almost unchanged at 6,779.5 by 0000 GMT, after swinging between positive and negative territory for most of the early part of the session.

Tech stocks were the biggest drag on the benchmarks, following losses to US peers who were under pressure from rising bond yields and concerns over higher inflation impacting the valuation.

“The continued increase in real income should reflect better growth prospects for equities but if it rises suddenly, driven higher by flows of rapid repositioning, then we think the impact of a higher discount rate will attract equities lower,” said analysts at UBS are in a note.

Buy-now-pay-later giant Afterpay slumped 7.8% causing losses among local tech firms set for their worst session since Jan.28.

Investors will be watching for any changes to the US Federal Reserve’s dovish outlook from Chairman Jerome Powell when he speaks before the Senate Banking Committee at a later date.

Energy stocks rose by up to 4.1% and were on track to post their best session since January 13, lifted by a surge in oil prices as investors anticipated a slow recovery in US crude production following cold weather in the state of Texas. Oil Search rose 8.6% after posting a surprise underlying gain.

Newcrest Mining and AngloGold Ashanti led gains among gold miners, which rose 5.6%, as concerns over rising inflation and a weak US dollar pushed the metal higher.

Stronger gold bullion and copper prices supported a more than 1% gain in the heavyweight miner, which hit the highest level since Jan. 8. Copper prices broke the $ 9,000 mark for the first time since 2011 amid indications of limited supplies.

New Zealand’s benchmark S & P / NZX 50 index fell 0.6% to 12,356.68 and is on track for a fourth straight session of decline. (Reporting by Arpit Nayak in Bengaluru; Editing by Subhranshu Sahu)

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The outlook for Brazil’s 2021 inflation rises to new highs, above the central bank’s target: survey | Instant News


FILE PHOTOS: People walking on a popular shopping street before Christmas, amid the coronavirus disease (COVID-19) outbreak, in Rio de Janeiro, Brazil, December 23, 2020. REUTERS / Pilar Olivares / File Photo

BRASILIA (Reuters) – Brazil’s inflation outlook this year rose for a seventh week and to new highs, a central bank survey of economists showed on Monday, while official interest rates are now expected to double by the end of the year.

The median forecast for IPCA consumer price inflation at the end of this year rose to 3.8% from 3.6%, according to the latest ‘FOCUS’ weekly survey of more than 100 economists.

That’s above the central bank’s target of 3.75%, with a margin of error of 1.5 percentage points on either side, and the highest forecast for 2021 in the series.

The forecast for average inflation over the next 12 months is up to 3.8% from 3.7%. The central bank’s final 2022 target is 3.50%.

A persistently weak exchange rate, strong global commodity prices, and heightened concerns over the government’s fiscal position have all pushed inflation expectations higher, and hence interest rate expectations.

The forecast for the benchmark Selic’s benchmark interest rate at the end of this year rises to 4.00% from 3.75%, the survey showed, showing that markets now expect Selic rates to double this year from the current record low of 2.00%.

Last month, the outlook for the end of 2021 was 3.25%. But the central bank dropped its forward guidance at its January 19-20 policy meeting, citing rising inflation expectations near its target over the next few years.

Credit Suisse and Barclays economists expect the central bank to raise interest rates as early as next month.

The FOCUS survey also showed that economists expect realization later this year at 5.05 per dollar, up from 5.01 per dollar last week. It is currently trading around 5.40 per dollar.

Reporting by Jamie McGeever; Edited by Catherine Evans

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The FOREX-Recovery bet pushed the dollar to fresh lows | Instant News


    * Aussie, kiwi make three-year peaks
    * Sterling gains as lockdown finish-line comes in to view
    * Rising U.S. yields drag on Japanese yen
    * Graphic: World FX rates tmsnrt.rs/2RBWI5E

    By Stanley White and Tom Westbrook
    TOKYO/SINGAPORE, Feb 22 (Reuters) - The U.S. dollar was sold
to multi-year lows against sterling and the Australian and New
Zealand currencies on Monday, as investors cheered vaccine
progress and wagered on the pandemic recovery bringing a global
trade boom and an export windfall.
    The British pound hit $1.4043, its highest since
April 2018, as Prime Minister Boris Johnson charts a path out of
lockdowns on the back of rapid vaccinations.
    The Aussie rose as much as 0.5% to an almost
three-year high of $0.7908 and the kiwi hit $0.7338,
also its best since early 2018, helped by S&P's upgrade of New
Zealand's sovereign credit ratings by a notch.
    The euro was steady at $1.2119, while the yen
 was the only major to cede ground to the greenback as
rising U.S. Treasury yields drew investment flows from Japan. 
    Benchmark 10-year Treasury yields rose to
1.3940%, their highest since Feb. 2020 and the dollar was up
0.2% to buy 105.73 yen.
    With local yields anchored by the Bank of Japan, the yen
remains particularly sensitive to the U.S. bond market, and has
dropped 2% this year while U.S. ten-year yields have climbed
nearly 50 basis points.
    Sovereign yields elsewhere in Asia have gained in tandem, or
in the case of Australia and New Zealand far in excess of U.S.
rates, leaving little or no relative benefit for the dollar, as
investors begin to price in a pickup in global inflation.
    "There's a tide of higher rates across the board, and
whether the U.S. does an extra five basis points than Germany is
neither here nor there," said Jason Wong, senior market
strategist at BNZ in Wellington.
    "The bigger picture is (the United States) has got massive
debt issuance for stimulus and to find a buyer for that debt you
either need higher rates or a lower currency or both, and at the
moment we're getting both."
    The U.S. dollar index was steady at 90.355.
    
    HOT COMMODITY
    Besides the U.S. budget deficit, a growing trade deficit has
also weighed on the dollar, as have the large gains that rising
commodity prices have delivered to exporters' currencies.
    Copper has gained roughly 8% for the year and hit a
nine-year peak on Monday, oil has gained more than 22% for the
year to date, iron ore about 10% and dairy prices nearly 7%.
    The Aussie dollar, which rose nearly 40% from last March's
trough through to the end of 2020 has added another 2% this
year, while the kiwi and Canadian dollar have added 1% or more
and analysts said the rallies might have further to run.
    "We are recommending a long AUD/USD trade idea," said
analysts at MUFG Bank in a note to clients. "The Aussie is
continuing to benefit from the outperformance from building
optimism over the global growth/reflation outlook which is
helping to improve Australia's terms of trade."
    The bank also recommends a long sterling position as
diminished Brexit uncertainty and solid progress in vaccinating
the British population herald a strong economic recovery.
    Ahead on Monday, British Prime Minister Johnson is expected
to outline a roadmap out of lockdowns, a German sentiment survey
is due and European Central Bank President Christine Lagarde is
expected to sound dovish in a speech beginning at 1345 GMT.
    Later in the week, the New Zealand central bank sets policy
on Wednesday and then U.S. Federal Reserve Chairman Jerome
Powell testifies before Congress, also on Wednesday.
    In the cryptocurrency market, bitcoin eased
slightly to $56,159, but was still near a record high as the
digital asset gains more mainstream acceptance.
    Ether, a rival cryptocurrency, fell to $1,871.
    
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    Currency bid prices at 0415 GMT
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar                  $1.2121        $1.2118     +0.03%         -0.79%      +1.2135     +1.2110
 Dollar/Yen                   105.6400       105.4900    +0.14%         +2.28%      +105.7350   +105.5050
 Euro/Yen                     128.04         127.75      +0.23%         +0.88%      +128.1300   +127.7000
 Dollar/Swiss                 0.8975         0.8965      +0.16%         +1.49%      +0.8979     +0.8962
 Sterling/Dollar              1.4020         1.4001      +0.11%         +2.60%      +1.4051     +1.4012
 Dollar/Canadian              1.2607         1.2619      -0.09%         -0.99%      +1.2617     +1.2581
 Aussie/Dollar                0.7876         0.7868      +0.11%         +2.39%      +0.7908     +0.7864
 NZ                           0.7307         0.7297      +0.18%         +1.80%      +0.7337     +0.7292
 Dollar/Dollar All spots
Tokyo spots
Europe spots 
Volatilities 
Tokyo Forex market info from BOJ

    
 (Reporting by Stanley White in Tokyo and tom Westbrook in
Singapore; Editing by Sam Holmes)
  

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