APAC Morning Update - 01/03/21

The NZDUSD opens at 0.7235 while the AUDUSD opens at 0.7706

Well the Kiwi and the Aussie, along with risk assets globally have woken up on the wrong side of the bed. Locally Auckland’s 7 day lockdown is not helping life, but it was the large jump in yields on Friday that has got the market on edge. When your strategy of paying down debt is to issue more debt, it is all fun and games while it is going, but what happens when these emergency measures eventually stop? As we can see from how jittery the market got, it is hard to see it being a super smooth transition.

On Friday the RBA increased its bond purchases to try to limit the rise in yields. Remember it was not just the US long term debt in which the yields were increasing. When the RBA does buy more bonds than expected, this is stimulatory as it helps keeps the yield down, but as a consequence of the looser monetary policy, you do see the flow into a weaker AUD.

Global equity markets are well off: Dow -1.5%, S&P 500 -0.5%, FTSE -2.5%, DAX -0.7%, CAC -1.4%, Nikkei -4.0%, Shanghai -2.1%.

Gold prices are off 2.4%, currently trading at $1,733 an ounce. WTI Crude Oil prices are down 2.8% trading at $61.7 a barrel

AUDUSD 0.7706 -2.6%
AUDEUR 0.6384 -1.6%
AUDGBP 0.5527 -1.8%
AUDJPY 82.12 -2.2%
AUDNZD 1.0651 -0.4%
GBPAUD 1.8078 1.9%

NZDUSD 0.7235 -2.2%
NZDEUR 0.5993 -1.3%
NZDGBP 0.5190 -1.5%
NZDJPY 77.10 -1.9%
NZDAUD 0.9391 0.4%
NZDCAD 0.9218 -0.8%
GBPNZD 1.9263 1.5%