Worldwide coronavirus cases surpass 33.5 million with over 1,005,000 official deaths.
The New Zealand Dollar has been camped out around 0.6550 versus the greenback in trading this week as markets wait for directional cues. Equity markets surged back, recovering most of last week’s losses with the DOW, Nasdaq and S&P all up over 1.5% this morning. Usually we would see a push higher in the NZD but with recent RBNZ dovish comments around economic uncertainty this has left the kiwi struggling to stay at current levels across the board. Last week’s RBNZ Monetary Policy review never highlighted any surprises. Holding interest rates unchanged at 0.25% and also maintaining the current level of the asset purchase programme. The central bank re-confirmed that all options are still on the table if needed including bringing in negative interest rates and or bank funding for lending schemes or possibly the purchase of foreign asset purchases. Any action won’t be taken until early 2021 however.
Key Points:
- UK Prime Minister Jphnson is set to announce measures to assist the unemployed retain jobs
- US Equity indices are higher led by Nasdaq up over 1.5%, of note airline stock surged with Boing +6.52%, Delta Airlines +5.2% and United Airlines +5.06%
- Fed’s Mester expects US unemployment to end the yegar around 7-8% range but reiterated the economy was still in a “deep hole” dependant on coronavirus
- The last “Monmouth” national poll has Biden at 50% and Trump at 45%
Major Announcements last week:
- The RBNZ left the cash rate unchanged at 0.25%
- US employment came in at 870k, 845k was predicted ending the week of 19 Septmember
- Powell says further downside risks to the economy remain
- ECB’s Lagarde says the Euro currency is not a policy target for the ECB