NZD: NZD/USD - Breaks 0.5800 As USD Surges On Strong Data
The NZD/USD had a range overnight of 0.5759 - 0.5831, Asia is trading around 0.5770. US stocks took another leg lower and the USD accelerated higher on much stronger US data. The NZD broke through its pivotal 0.5800 support on the back this and extended lower. The price action in the USD stands out and there could be a positional problem, this together with the clear break of the support should see the NZD continue to be sold on rallies. First sell zone would be just above 0.5800, though corporate month-end continues today and this should keep demand for the USD underpinned. US Futures have opened slightly higher this morning, E-minis +0.10%, NQU5 +0.10%.
- MNI: Markets Overestimating Lower OCR - Ex-RBNZ Officials. New Zealand’s Q2 GDP miss is unlikely to push the Reserve Bank to lower the 3% Official Cash Rate below 2.5% without weaker inflation data, former RBNZ officials told MNI, noting recent market pricing had likely overreacted to the economic growth miss.
- MNI AU - ANZ Consumer Sentiment Rises, But Still Sub Recent Highs : The ANZ New Zealand consumer sentiment index rose 2.8% in Sep, putting the index back up to 94.6 (from 92.0 in Aug). The improvement will be welcome, but we still sit off recent highs from late 2024. After today's rise, it doesn't suggest a significant change to the broader consumer spending backdrop.
- Options : Closest significant option expiries for NY cut, based on DTCC data: 0.5855(NZD305m). Upcoming Close Strikes : 0.5785(NZD754m Sept 30), 0.5875(NZD372m Sept 30) - BBG
- CFTC Data of last week shows Asset Managers beginning to rebuild their short positions in the NZD, -11933(Last -3121). The Leveraged community is doing the same as it looks to rebuild its own shorts, -5327(Last -1874). Positioning shows the market is again turning bearish on the NZD.
Fig 1: NZD/USD Spot Weekly Chart
Source: MNI - Market News/Bloomberg Finance L.P
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OIL: Crude Lower On Fed Worries
Oil prices sank on Tuesday on wariness over the most recent attack on the Fed’s independence. Not only has President Trump constantly pressured Chair Powell to cut rates, but on Tuesday he removed Governor Cook. She has said he doesn’t have the authority to fire her. The USD index fell 0.2% in response.
- Oil prices are down on the week but levels are still above last Thursday’s low and Wednesday’s close. WTI fell 2.3% to $63.31/bbl to be down 7.2% in August. It reached a low of $63.13 late in the US session. It is currently trading around $63.37. Initial support is $61.29, with resistance at $66.56.
- Brent was down 2.3% to $67.23/bbl after a low of $67.11 and is now 6.2% lower this month. Tuesday’s move affirms the existing bear cycle. Initial support is at $65.01, while resistance is at $69.98.
- Bloomberg reported that US crude inventories fell 1mn barrels last week with a 500k drop at Cushing, according to people familiar with the API data. Products were also lower with gasoline down 2.1mn and distillate 1.5mn. The official EIA data is out on Wednesday.
- The US Department of Homeland Security issued a notice that India will face a 25% punitive tariff as of Wednesday because it continues to purchase Russian oil. There are concerns that global supplies will be materially impacted if it is extended to China and enforced. However, as many trade threats have been delayed or withdrawn, India continues to buy Russian crude.
ASIA: Government Bond Issuance Today
- Vietnam To Sell VND 0.5Tln 2030 Bonds; (TD2530010)
- Vietnam To Sell VND 8.5Tln 2035 Bonds; (TD2535028)
- Vietnam To Sell VND 0.5Tln 2055 Bonds; (TD2555052)
- Vietnam To Sell VND 2.5Tln 2040 Bonds; (TD2540037)
- Thailand to Sell THB20bn of 2035 Bonds
- Thailand to Sell THB7bn of 2072 Bonds
- Bank Indonesia to Sell 32D SUVBI Bills
- Bank Indonesia to Sell 182D SUVBI Bills
- Bank Indonesia to Sell 273D SUVBI Bills
- Bank Indonesia to Sell 91D SUVBI Bills
- Bank Indonesia to Sell 367D SUVBI Bills
- Singapore to Sell S$2.5 Billion Bonds Due 2030
- Philippines To Sell PHP 25.0Bln 2050 Bonds (PH0000059891)
- Philippines To Sell PHP 10.0Bln 2028 Bonds (PIBD0728D649)
ASIA: Coming Up in Asia Today
| 0230GMT | 0930HKT | 1130AEDT | China Industrial Profits YTD YoY JULY |
| 0230GMT | 0930HKT | 1130AEDT | China Industrial Profits YoY JULY |
| 0300GMT | 1000HKT | 1200AEDT | South Korea Retail Sales YoY JULY |
| 0300GMT | 1000HKT | 1200AEDT | South Korea Department Store Sales YoY JULY |
| 0300GMT | 1000HKT | 1200AEDT | South Korea Discount Store Sales YoY JULY |
source: Bloomberg Finance LP / MNI
