Macro morning (sterling and kiwi rockets)

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rocket

by Chris Becker

Finally some good volatility last night on world markets – let’s have a look:

I’ll start in reverse order with the Reserve Bank of New Zealand (RBNZ) interest rate decision this morning – they moved! Rates were raised 25bps to 3.25% which sent a rocket under the Kiwi(NZDUSD) – currently at 86.10 or so, up 100 pips!

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The Kiwi has been on a tear for the last year or so, and this move up will see the other “battler” pushing through 87.5 against the USD very shortly:

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Of course, given the interest rate differential, this flattened the AUDNZD, which remains in a huge bear market, once at over 1.35:

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AUDNXD

The latter is very disappointing for Australian’s wanting to invest in New Zealand (i.e. me, or tourists too I suppose) – is parity on the cards? Perhaps, if the RBA doesn’t move anytime soon.

There were some significant bearish reversals on stock markets last night, the S&P500, FTSE100 and DAX30 all off – this was probably because of the announced cuts by the IMF in its global growth forecast. Maybe – I just think stocks were looking for any excuse to sell off.

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Theres a bearish double top present on the FTSE hourly charts, with significant overhead resistance at ca.6864 on the dailies – this is the weakest of the major bourses, to be sure:

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As for commodities – meh – gold finished last night where it started yesterday morning (although some nice intra-day trends were present, as always around the relevent exchange opens) and oil was surprisingly calm given some Middle East jitters, and is forming a solid base for a breakout soon.

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In currencies, pound sterling (GBPUSD) rose significantly on the back of some very good job numbers, including a drop in the official unemployment rate. This looks good short term for sterling, but Im not sure it will translate into bigger gains on the dailies:

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What’s going on today? Aussie job data at 11.30 is the biggie of course and should see AUDUSD volatility rocket as well. Later tonight some retail data from the US and European CPI’s will keep markets on their toes.

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