New Zealand Cuts Interest Rate to 1.75% in October

News Event

From Trading Economics: The Reserve Bank of New Zealand lowered its official cash rate by 250 basis points to 1.75 percent to a fresh record low at its October 2016 meeting, as widely expected. Policymakers noted, stronger New Zealand dollar has lowered import prices and kept inflation below the medium term target range of 1 to 3 percent for the past two years. Interest Rate in New Zealand averaged 7.73 percent from 1985 until 2016, reaching an all time high of 67.32 percent in March of 1985 and a record low of 2 percent in August of 2016. Interest Rate in New Zealand is reported by the Reserve Bank of New Zealand.

Market Snap

Market Closing Wrap

In European Equity Markets stocks fell on Wednesday after Republican nominee and political outsider Donald Trump won the U.S. presidential election, bringing uncertainty that roiled global markets. The STOXX Europe 600 fell 0.6 percent, having been down 2 percent in early trade. Top faller was Spanish bank BBVA, down 7.6 percent. It had been tipped by analysts to suffer if Trump won, as it has the biggest Mexican revenue exposure of all European banks. Italian stocks underperformed, with the FTSE MIB down 2.3 percent. Healthcare stocks were the standout sector performers, up 2.7 percent in early trade as potential risks to pricing practices in the United States were seen as significantly reduced with a Trump win.

In Currency Markets the dollar rose in early North American trading as investors re-evaluated the impact of the victory of Republican Donald Trump in the U.S. presidential election. Markets initially entered full risk-aversion mode, with investors scurrying out of the dollar and Mexican peso - which hit a record low - and into perceived safe havens such as the Japanese yen. The euro fell to its lowest since Oct 31 against the dollar after U.S. stock markets opened, falling to $1.0938. The dollar remained lower against the yen, down 0.6 percent at 104.55 yen, but recovered substantially from its overnight low of 101.15 yen. The Mexican peso fell more than 13 percent at one point to an all-time low just below 21.00 pesos per dollar.

In Commodities Markets  oil prices rose on Wednesday, as U.S. financial markets bounced back from a early Brexit-like slide that followed Donald Trump's surprise victory in the U.S. presidential election. Crude had tumbled as much as 4 percent early in the session, in the immediate aftermath of the U.S. presidential election results. U.S. crude tumbled to near $43, a near two-month low. Brent crude was up 66 cents at $46.70 a barrel, bouncing back from a three-month low hit earlier. U.S. crude rose 70 cents to $45.68. The Energy Information Administration said U.S. crude stockpiles rose 2.5 million barrels last week, a million more than analysts had forecast. Spot gold was just 1 percent higher at $1,287.73.

In US Equity Markets  stocks were little changed on Wednesday, rebounding from surprising overnight losses fueled by the U.S. election as sectors that appeared poised to benefit from a Donald Trump presidency led the charge. After tremendous losses in the overnight session, the Dow and S&P 500 briefly turned positive shortly after the open. The Dow Jones industrial average rose 0.11 percent, to 18,353.52, the S&P 500 lost 0.1 percent, to 2,137.46 and the Nasdaq Composite fell 0.24 percent, to 5,181.15. Big pharmaceutical names gained, with Pfizer jumping 7.8 percent. The iShares Nasdsaq Biotechnology ETF climbed 7.2 percent and was on track for its biggest daily percentage gain in eight years.

In Bond Markets  U.S. 30-year Treasury yields rose to more than nine-month highs on Wednesday as investors bet that U.S. President-elect Donald Trump will enact protectionist trade policies that will weaken the U.S. dollar and increase inflation, eroding the value of U.S. bonds.  Benchmark 10-year notes were last down 24/32 in price to yield 1.95 percent, up from 1.86 percent late Tuesday. The yields rose as high as 1.97 percent, the highest since March 16. Thirty-year bonds fell 2-21/32 in price to yield 2.76 percent, up from 2.63 percent on Tuesday, after earlier rising to 2.81 percent, the highest since Jan. 28.

Source: Institute of Trading and Portfolio Management