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Equity markets mostly strengthened as voting began at polling stations across the US. The S&P 500 gained 1.1%, the Euro Stoxx 50 rose 0.4%, while the FTSE 100 edged down 0.1%. The yield on the US 10-year increased by 4 bps to 4.32%.
The US ISM services index exceeded expectations, reaching its highest growth rate since mid-2022 with an increase of 1.1 pts to 56 in October. A reading above 50 indicates expansion. New orders and business activity also showed strong growth, at 57.4 and 57.2 respectively, highlighting ongoing economic momentum as the fourth quarter begins. The ISM employment index rose nearly five points to 53, its highest level since August 2023.
Polls show a tight race, though Trump holds a slight lead according to Polymarket, Kalshi and Predictit. The USD weakened against all major G10 currencies.
NZDUSD is steady around 0.6000 overnight, buoyed by improved risk appetite. The near-term target remains 0.6050 on the upside, with 0.5940 expected to act as support if the pair moves lower.
NZDAUD has edged down to 0.9040, with the AUD gaining following the RBA’s slightly hawkish rate decision yesterday. As anticipated, the RBA kept the cash rate at 4.35% and maintained a cautious tone, keeping options open. They signalled a mild hawkish outlook, with the first rate cut expected in February 2025 and the cash rate forecasted to end next year at 3.60%.
NZDGBP has softened slightly to 0.4605, while NZDEUR has slipped back to 0.5490, the same level as yesterday after briefly reaching 0.5510. Production in France has slowed, with September industrial output down 0.9% compared to a 1.1% increase in August, and manufacturing output declining 0.8% m/m.
Today’s main event will be the US election, with the first polls closing around noon NZ time and the final battleground state, Nevada, closing at 4 pm. The earliest we might see a media projection for the presidential winner would be around 5 pm NZ time, though with polls showing a tight race, a clear result could take days if it’s very close. Market volatility is likely this afternoon as results starts coming in.
On the domestic data front, attention will turn to NZ’s Q3 labor market data. A result in line with expectations could reinforce the outlook for another 50 bps rate cut later this month.
Here are the latest mid-market rates:
| Currency Pair | Mid-market rate |
| NZD/USD | 0.5997 |
| NZD/AUD | 0.9038 |
| NZD/JPY | 90.92 |
| NZD/CNY | 4.2595 |
| NZD/EUR | 0.5489 |
| NZD/GBP | 0.4601 |
| NZD/HKD | 4.6614 |
| NZD/SGD | 0.7885 |
