- Major US indices close higher for the 4th consecutive day
- Carney to meet Trump at World Cup draw as Canada-U.S. trade talks remain frozen
- RBNZ Hawkesby: We are in a position where we can sort of watch and see how things progress
- NZ Finance minister names Rodger Finlay chair of the RBNZ
- Two military personnel shot near the White House according to ABC News
- Crude oil futures settle at $58.65
- Federal Reserve minutes from the November meeting:Little changed since the previous report
- Baker Hughes oil rig count -12 to 407
- Atlanta Fed GDPNow falls to 3.9% from 4.0%
- US 30 year fixed-rate mortgage 6.23% vs 6.26% last week
- Major European's indices close higher
- The US treasury sells $44 billion of 7 year notes at a high yield of 3.781%
- ECB's Lane: For sustainability of inflation at 2%, needs to see deceleration of energy px
- Crude oil inventories build of 2.774 million versus estimate 0.055 million
- Tech sector rallies: Nvidia leads the charge, Google stumbles
- ECBs Vujcic: It has become more difficult to forecast food inflation due to climate change
- US Durable goods orders for September 0.5% versus 0.3% estimate
- US initial jobless claims 216K vs 225K expected
- investingLive European markets wrap: Another UK budget fiasco
- UK chancellor Reeves: There will be no return to austerity
The US Dollar traded mostly lower against most major peers today (with the notable exception of the Yen), as risk appetite returned to the markets and specific domestic catalysts drove outperformance in the New Zealand Dollar and British Pound.
1. The RBNZ Shock: A "Hawkish Cut" (NZD +1.32%)
The New Zealand Dollar (Kiwi) was the undisputed top performer of the day, surging 1.32% to 0.5694.
The Catalyst: The Reserve Bank of New Zealand (RBNZ) cut the Official Cash Rate (OCR) by 25 basis points to 2.25%, as widely expected.
The Twist: Despite the cut, the move was interpreted as "hawkish" because the RBNZ explicitly signaled that the easing cycle is effectively over. Governor Christian Hawkesby’s committee indicated that rates are likely to remain on hold throughout 2026, defying market expectations for deeper cuts.
Market Reaction: This "one-and-done" signal forced a massive repricing of interest rate expectations, triggering a short squeeze that propelled the Kiwi significantly higher against the Greenback and the Aussie.
2. Sterling and the Budget (GBP +0.49%)
The British Pound (Cable) staged a solid recovery, rising 0.49% to 1.3231, as markets reacted positively to Chancellor Rachel Reeves' Autumn Budget.
Budget Summary: The Chancellor delivered a "growth-focused" budget that avoided the worst-case tax scenarios feared by the City. Key points included:
No new bank taxes: A decision to avoid a fresh tax squeeze on the banking sector reassured investors.
Fiscal Headroom: The release (inadvertently leaked early by the OBR) revealed a larger-than-anticipated fiscal buffer, signaling fiscal responsibility alongside investment.
Lack of 2026 Tax Hikes: The absence of aggressive future tax hikes for the coming year calmed "budget jitters."
Market Reaction: The combination of fiscal prudence and growth initiatives triggered a relief rally. Gilt yields eased, and the Pound moved higher as the "uncertainty risk premium" that had weighed on the currency in recent weeks evaporated.
3. Broader Currency Moves
USD/JPY (+0.27% to 156.46): The Yen was an outlier, weakening slightly against the Dollar. This move largely reflects improved global risk sentiment (equity markets recovering, fueled by reports of a potential Ukraine-Russia peace framework), which reduced demand for safe-haven assets like the Yen. The lower JPY also occurred despite expectations that the BOJ may look to raise rates in reaction to the weaker JPY. Well the JPY was weaker today.
USD/CAD (-0.41% to 1.4038): The Canadian Dollar strengthened (pushing USD/CAD lower) despite oil prices testing key support levels. The Loonie likely benefited from the broad weakness in the USD and positive cross-border trade sentiment.
AUD/USD (+0.76% to 0.6516): The Australian Dollar rallied in sympathy with the NZD and benefited from the overall "risk-on" tone in global markets.
Fundamentally and other market data.
- US initial jobless claims came in lower than expectations that 216K vs 225K last week. No noticeable slowdown in the weekly claims.
- US durable goods came in stronger than expectations, but it was for the month of September as they catch up continues
- Crude oil inventories showed a greater than expected build of inventories. Despite the build, will prices are higher in the day by $0.63 at $58.58
- Gold prices moved higher by $34 or 0.83% at $4164
- Silver soared by $1.80 or 3.5% to $53.25
- Bitcoin rose sharply by $3000 or 3.3% to $90299 (see post here). The high price reached $90,445. The next target comes in at $94,229 (the 38.2% retracement of the move down from the October 27 swing high).
- US stocks moved higher led by the NASDAQ index up 0.82%. The S&P index rose 0.69% and the Dow industrial average rose 0.67%.
- US yields were mixed with the two-year up to basis points at 3.479%. The 10 year yield was down 0.8 basis points and back below the 4.00 level at 3.994%.
