Market Update 26/09/2024

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
 

Equities saw a decline, with the S&P 500 down 0.2%, while the Euro Stoxx 50 and FTSE 100 fell 0.5% and 0.2%, respectively. Bond yields edged up along with the DXY index, pushing the US 10-year yield 5 bps higher to 3.78%. Iron ore surged on expectations that China’s massive stimulus package would boost demand. Meanwhile, gold approached record highs again.
 
New home sales in the US declined last month, while another report showed mortgage rates have fallen for eight consecutive weeks, boosting homebuying demand. 
 
US futures are still pricing in about an 80% chance of another 50bps rate cut by the Fed at their 7^th November meeting. Following weaker-than-expected US consumer confidence data on Tuesday, investors slightly favoured the possibility of a second consecutive 50bps cut. It’s shaping up to be another close call.
 
The USD has shifted direction, strengthening broadly across the board.
 
NZDUSD which climbed above 0.6350 yesterday has since dropped back to 0.6260. The NZD has a mixed performance, reaching a YTD high after outperforming other major currencies. It initially gained momentum from last week’s large rate cut by the US Fed, followed by RBA’s pause on Tuesday, and a broad China stimulus package that boosted an economy on the brink of deflation. Weak US consumer sentiment data later contributed to the USD’s weakening, and China’s central bank lowering its one-year loan interest rate further fuelled risk assets, including the NZD. This all helped the NZD hit a fresh yearly high before an aggressive pullback. If NZDUSD climbs back above 0.6300 today or tonight, support is expected at 0.6225, a previous long-standing resistance.
 
NZDAUD has pulled back to 0.9180, as AUDUSD also retreated from a 19 month high reached earlier in the session following a drop in monthly inflation to its lowest level in three years.
 
NZDJPY pulled back from 91.22 to 90.65, with the yen weakening alongside the NZD as Asian stocks gave up some of their earlier gains.
 
NZD is lower against both GBP & EUR.
 
There’s no local or regional economic data scheduled for today. The focus shifts to US GDP and unemployment data tonight at 12:30 am NZT, followed by a speech from Fed Chair Powell at 1:30 am NZT. Tomorrow night, attention turns to US PCE data, the Fed’s preferred inflation measure.

 Here are the latest mid-market rates:

 
Chart of the Day