Commodity pressures abounds

21 July, 2015

It is commodities that have been taking centre stage at the early part of the week. Yesterday it was gold and the push below the 1,100 level, something which has been repeated again overnight. But other commodities have also been under pressure, including oil, platinum and palladium. For currencies, the declines in commodities has put pressure on both the Canadian dollar and also the Aussie. The standout has been the kiwi, recovering from the 0.65 level on the dollar. A continuation of recent trends could once again start to impact on monetary policy expectations, just as the momentum towards an increase in Fed rates this year was starting to build once again. All of this has left the theme of the past few weeks, namely Greece, somewhat in the background.

The focus is likely to remain on other markets today. European equity markets have pushed ahead since the low seen 7th July, with only another 3% to go before new highs for the year are made on the EuroStoxx 50. For currencies, the main policy focus will be with the New Zealand interest rate decision tomorrow evening, where expectations are fairly strong for a further 25bp easing to 3.00% on the key rate. Watch out for further comments on the currency in the accompanying statement, with both the RBNZ and RBA having been more vocal than most on their respective currencies in the past couple of years. Last month they said that the kiwi remains over-valued and that a “further significant downward adjustment is justified”. We’ve seen the trade-weighted kiwi down around 4% since then, so it’s unlikely that we will see a strengthening of their concerns on the currency front.


Source link  
Markets recover after the drop

The markets decline on investors' fears that trade conflicts will drag on and slow down demand, and this dynamic coincided with breaking through important...

Markets pressured by Huawei problem

Alphabet and some other American IT companies have suspended business with Huawei, which is one of the first examples of major consequences for...

The climate is changing rapidly

British people need to fly less, drive electric cars, eat little meat and turn their home thermostats down to 19 degrees Celsius (66 Fahrenheit) in order to rein...


Chinese stocks saw their worst week

Chinese stocks have taken investors on a ride this year. Shanghai and Shenzhen have been the best performing global markets this year, with the Shanghai...

Risk-sensitive currencies on the rise

Stock markets show growth after the release of strong data for China and Japan as their respective PMIs were better than expected which supported...

Trump again puts pressure on OPEC

President Donald Trump told OPEC on Thursday that its members should start pumping more oil, marking his second warning to the producer group this year...


Turkish lira fell by 5% before elections

The Turkish lira dropped by as much as 5 percent against the dollar on Thursday morning, as the country gears up for elections this weekend. The greenback...

May won't ask for a long Brexit delay

Prime Minister Theresa May won't ask the European Union for a 'long' delay to the Brexit deadline, her office said, after pro-Brexit ministers objected...

Demand for safe assets grows

Markets remain under moderate pressure, despite the Fed comments. Powell's semi-annual speech in Congress reinforced expectations that the US Central Bank...

  


Share it on:   or