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Market Update 03/10/2024

Welcome to our daily market update, where we help keep you informed on the latest happenings in the world of FX. If you have any questions or would like anything further explained, please don’t hesitate to reach out to your account manager or email info@cafx.com

It was a mixed session overnight in commodity and stock markets. Oil prices initially strengthened but later pulled back, while European stocks drifted for much of the session before rebounding. Both the Euro Stoxx 50 and FTSE 100 ended up 0.2%, and the S&P 500 closed 0.1% higher after fluctuating between gains and losses. Meanwhile, the yield on the US 10-year Treasury increased by 5 bps to 3.78%.
 
US ADP private payrolls jumped by 143k in August, a bit higher than the 124k everyone was expecting, snapping a five-month streak of smaller gains. As for wages, they’ve cooled off as people switching jobs saw a 6.6% pay bump y/y, which is the lowest it’s been in over three years. And for those sticking with their jobs, wage growth eased to 4.7% y/y. The wage data for people switching jobs supports the findings from the JOLTS report, indicating that the labor market has stabilized and is no longer a major driver of inflation.
 
The USD strengthened due to stronger-than-expected data, while a slight risk-averse sentiment lingered in the markets following the escalating tensions in the Middle East.
 
NZDUSD bounced back above 0.6300 yesterday afternoon after initially dropping due to risk-off sentiment following Iran’s attack, but it underperformed overnight, dipping towards 0.6258. Technically, the timing of these events has been unfavourable for the NZD, which has now formed a double top around 0.6370/0.6380. However, it may find more stability as many local economists are now expecting the RBNZ to deliver a 50bps rate cut next week.
 
NZDAUD dropped below 0.9100, while AUDUSD rose to a high of 0.6915 after midday yesterday before pulling back to 0.6876 by the end of the session.
 
NZDJPY has risen to 91.65. Following a meeting with BoJ Governor Ueda, new Prime Minister Ishiba stated, “I don’t think the conditions are suitable for another rate hike”. This wasn’t well received for the JPY, as many already doubt the BoJ’s independence. After Ishiba’s comments, Ueda remarked, “while we will adjust our easing stance if the economy and prices align with our forecasts. I also mentioned we want to thoroughly assess this as we have ample time”. In response, USDJPY climbed from around 144.28 to just over 146.50.
 
The economic calendar is relatively quiet, with the main focus on tonight’s US ISM services report and the latest weekly jobless claims data.

 

 Here are the latest mid-market rates:

Currency Pair Mid-market rate
NZD/USD 0.6261
NZD/AUD 0.9094
NZD/JPY 91.64
NZD/CNY 4.4055
NZD/EUR 0.5667
NZD/GBP 0.4719
NZD/HKD 4.8602
NZD/SGD 0.8090

Chart of the Day 

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