NZD: Asia Wrap - NZD/USD Probes Above 0.5850
The NZD/USD had a range of 0.5855 - 0.5868 in the Asia-Pac session, going into the London open trading around 0.5860, +0.05%. The Nvidia quarterly earning report disappointed being the poster child for AI and Tech it will be worth watching to see how the market digests this. The NZD again found some demand back towards 0.5800 overnight, sellers should continue to be around looking to fade any move back towards the 0.5950 area initially. US Futures traded heavily on the open on the back of Nvidia but have pared back a good portion of those losses, E-minis -0.05%, NQU5 -0.25%.
- Inflation Stabilising, Weaker Employment But Exports Improve: ANZ business confidence for August rose to 49.7 from 47.8, the highest since March. However, the activity outlook deteriorated to 38.7 from 40.6, the weakest since May. ANZ noted that the August 20 rate cut drove some “isolated lifts in the data” but there was “no generalised confidence improvement”. The survey remains consistent with a gradual but lacklustre recovery.
- Labour Market May Be Stabilising: NZ filled jobs rose for the second straight month in July, which is a tentative sign of some stabilisation in the labour market but the increases remain slight. July was up 0.2% m/m after 0.1% but was still down 0.7% y/y but an improvement from June’s -1.3% y/y and April’s -2.0% y/y. Q3 labour market data is not out until 5 November and so August/September filled jobs will be monitored closely (29 Sep/28 Oct).
- Options : Closest significant option expiries for NY cut, based on DTCC data: none. Upcoming Close Strikes : 0.5700(NZD500m Sept 2) - BBG
- AUD/NZD range for the session has been 1.1103 - 1.1124, currently trading 1.1110. The dovish RBNZ has seen the Cross surge higher breaking back above 1.100 convincingly. This move should now continue to see dips supported as it looks to build momentum to push higher.
Fig 1: NZD/USD Spot 2H Chart
Source: MNI - Market News/Bloomberg Finance L.P
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GOLD: Gold In Narrow Range Ahead Of Key Events This Week
Gold has been range trading during today’s APAC session, holding Monday’s loss, as markets wait for key events taking place this week. Wednesday’s FOMC decision is a particular focus but so too are trade talks, US Q2 GDP and July payrolls on Wednesday and Friday respectively. Bullion is 0.1%lower at $3312.2/oz after falling to a low of $3308.15 followed by a high of $3320.95. The moderately higher US dollar and yields have been pressuring gold.
- US-China talks will continue today. US commerce secretary Lutnick expects that there will be a 90-day extension of the tariff lull. Korea, Thailand and Brazil are working on agreements before the August 1 deadline.
- Bloomberg reported on research from Fidelity stating the possibility that gold could reach $4000/oz by end-2026 driven by Fed rate cuts, weaker greenback and continued central bank buying.
- Silver is down 0.2% to $38.10. It has been also been in a narrow range between $38.198 and $38.047.
- Equities are mixed with the S&P e-mini up 0.1% and KOSPI +0.5% but Hang Seng down 1.0% and Nikkei -0.9%. Oil prices are slightly lower with WTI -0.2% to $66.58/bbl. Copper is down 0.4%.
- Later preliminary June US trade, May house prices, July consumer confidence and June JOLTS job openings are released. There is also preliminary Q2 Spanish GDP.
CHINA: Bond Futures Fall Again
- Yesterday's rally proved to be short lived as bond futures sold off in the morning session to erase yesterday's gains.
- The 10yr is down -0.19 to 108.21 to mark seven out of eight days of falls.
- The 10yr remains below all major moving averages with the nearest the 20-day EMA at 108.65.
- The 2-year future is lower by -0.03 at 102.32 and remains below all major moving averages also, the nearest is the 20-day EMA at 102.40.
- The yield on the CGB 10yr has inched up to 1.73%
NZD: Asia Wrap - NZD/USD Fails Above 0.6000, Trades Heavy Into Month-End
The NZD/USD had a range of 0.5961 - 0.5976 in the Asia-Pac session, going into the London open trading around 0.5965, -0.08%. The pair could not hold onto its early gains yesterday and slid lower as the USD bounced strongly across the board. There is lots of event risk coming up this week and we are also heading into the corporate month-end today so there could be an extra demand for USD’s further pressuring the USD shorts. Support now seen back towards the 0.5850/0.5900 area.
- "NEW ZEALAND JUNE JOB ADS FALL 2.6% M/M: BNZ" - BBG
- "Job ads index fell 2.6% m/m following a revised 2% decline in May. Drops 2.8% y/y. After a year of relative stability, ads are again on a downwards trajectory: BNZ. “Consistent with the decline in job ads, we expect total employment fell modestly and the unemployment rate climbed to 5.3%” in 2q.
- Options : Closest significant option expiries for NY cut, based on DTCC data: none. Upcoming Close Strikes : 0.6000(NZD395m July 30), 0.5965(NZD424m July 31). - BBG
- CFTC Data shows Asset Managers again reduced their newly built longs in NZD +5034(Last +8192), the Leveraged community added slightly to their shorts last week -7328(Last -6744).
- AUD/NZD range for the session has been 1.0912 - 1.0930, currently trading 1.0928. Dips back to 1.0850/1.0900 should continue to find support as the pair tries to build momentum to move higher.
Fig 1: NZD/USD Spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
