2 Jul 2015
No talks before Greek referendum, NZD top loser – TDS
FXStreet (Barcelona) - Prashant Newnaha, Strategist at TD Securities, summarizes the financial market performance and key developments during the Asian trading session – Greece headlines, Increase in RBNZ rate cut expectations, Unloved Australian Fixed Income market.
Key Quotes
“Offshore markets continue to ignore risk of Greek contagion even as EU officials rule out further talks, awaiting the outcome of Sunday’s referendum first before engaging any further.”
“The only data release of note in Asia was Australia's May trade balance but this was never really going to be a market mover ahead of US payrolls later today (TD +233k, mkt closer to +240k).”
“The USD was up +0.8% yesterday following the June ADP and ISM beats and has more or less held those gains in Asia. The NZD hit a new trend low in our time zone of US$0.6694 but the move lower since yesterday’s London open has been fairly orderly even after the 5.9% plunge in dairy prices. NZ rates markets have taken a more aggressive stance, with Dec OIS near to fully pricing in a 2.75% cash rate, 7bps lower from yesterday’s close at 2.765%.”
“Australian fixed income is unloved today, 3yr yields +5bps, 10yrs +8bps, underperforming USTs and NZGBs where yields are essentially unchanged today. While there is nothing fundamental to explain ACGB underperformance, we note that technicals have turned bearish on the ACGB 10yr, with the 50d moving average nudging above the 200 day moving average.”
“Equity markets are firmer again, excluding China, the Nikkei up 1%, ASX +1.5%, Hang Seng +0.5% but China is down only 1.2% today.”
“Oil got drilled overnight after news of near record output, but prices are near to unchanged in Asia, as is most of the commodity.”
Key Quotes
“Offshore markets continue to ignore risk of Greek contagion even as EU officials rule out further talks, awaiting the outcome of Sunday’s referendum first before engaging any further.”
“The only data release of note in Asia was Australia's May trade balance but this was never really going to be a market mover ahead of US payrolls later today (TD +233k, mkt closer to +240k).”
“The USD was up +0.8% yesterday following the June ADP and ISM beats and has more or less held those gains in Asia. The NZD hit a new trend low in our time zone of US$0.6694 but the move lower since yesterday’s London open has been fairly orderly even after the 5.9% plunge in dairy prices. NZ rates markets have taken a more aggressive stance, with Dec OIS near to fully pricing in a 2.75% cash rate, 7bps lower from yesterday’s close at 2.765%.”
“Australian fixed income is unloved today, 3yr yields +5bps, 10yrs +8bps, underperforming USTs and NZGBs where yields are essentially unchanged today. While there is nothing fundamental to explain ACGB underperformance, we note that technicals have turned bearish on the ACGB 10yr, with the 50d moving average nudging above the 200 day moving average.”
“Equity markets are firmer again, excluding China, the Nikkei up 1%, ASX +1.5%, Hang Seng +0.5% but China is down only 1.2% today.”
“Oil got drilled overnight after news of near record output, but prices are near to unchanged in Asia, as is most of the commodity.”