Below we have collated the opinions of our rates trading desk on the near term price action following today's 2:30pm (AEST) June RBA announcement. We have included 3 scenarios - the RBA on pause with an accompanying neutral statement, a pause with a hawkish statement and a 25bp hike.
Markets: Equities bounce initially as US debt deal draws closer but then turn tail as US ISM report disappoints, global manufacturing PMIs generally weaker. USA: ISM manufacturing falls 4.4pts to 50.9 in July, below mkt. USA: Construction spending rises 0.2% mom in June, above mkt.
Markets: Equities weaker & Treasuries rally as US GDP report disappoints & US debt impasse drags on, Dollar weaker, mkts open more positively Monday morning as US debt deal said to be "very close".
Markets: Disappointing non-farm payrolls interrupts risk rally, S&P500 ends down 0.7%, 10-year Treasuries rally 11bps but Dollar strengthens against Euro as peripheral spreads widen. USA: Nonfarm payrolls rise 18k in June, well below mkt, unemployment rate rises 0.1pps to 9.2%.
Markets: European equities little changed on average but US equities rally as banks gain on lower-than-expected Basel capital buffers, hopes for successful Greek austerity passage and expected consumer benefit from lower commodity prices, Treasury yields rise, Dollar generally stronger.
OUTLOOK CURRENCY: Reduced risk appetite will limit topside moves for the NZD today to the low 0.81USD area as markets evaluate Asia's response to overnight moves. Expect support in the NZD to further emerge on an extension to 0.8060USD.
HEADLINES... Markets: US equities post another solid session, 10 year Treasuries little changed. In FX the USD trended a little lower as market participants anticipated the Greece confidence vote passing.
CURRENCY: The clock continues to tick as the Greek PM faces the Economist Telephone: +64 4 802 2199 confidence vote this morning. Topside moves for the NZD today should continue to be difficult to sustain given the uncertainty offshore.
Across Asia, regional markets are all lower as traders continued to worry about concerns of US growth and the Eurozone sovereign debt problems.
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