New Zealand Terms of Trade Fall in Q3

News Event

From Trading Economics: New Zealand's terms of trade decreased 1.8 percent on quarter in the three months to September of 2016, following an upwardly revised 2.5 percent drop in the previous period. Goods export prices went down 2.8 percent, the fourth straight decline in a row, led by falls in the prices of dairy (-3.7 percent), meat (-3.1 percent), and forestry (-4.1 percent). Meanwhile, goods import prices decreased at a slower 1 percent, as a decline in the price of plant and machinery (-3.7 percent) was partly offset by a rise in the price of petroleum and petroleum products (+11.5 percent).

Market Closing Wrap

In European Equity Markets stocks climbed to a three-week high on Wednesday, staying on track to end the month in positive territory, with energy stocks racing higher on expectations of a deal to cut crude oil production to tackle oversupply. The pan-European STOXX 600 rose 0.3 percent. Shares in state-backed British bank RBS fell 4.5 percent after it failed the Bank of England's stress test of seven British lenders and was told to boost its capital buffers.  Linde shares advanced 7 percent after the German industrial gases group received a fresh approach from U.S. rival Praxair for a merger of equals. Elsewhere, British packaging company RPC Group hit a record high and was last up 9.4 percent after reporting a 53 percent rise in first-half revenue.

In Currency Markets the U.S. dollar hit its highest level against the yen in 8-1/2 months on Wednesday and also rose against the euro and Swiss franc after a rise in oil prices pushed U.S. Treasury yields higher, while strong private payrolls data bolstered expectations for a hawkish Federal Reserve next year. The dollar rose about 1.7 percent against the yen to 114.43 yen, its highest level since early March. The euro fell about 0.8 percent against the dollar. The dollar also hit a roughly 10-month high against the Swiss franc of 1.0204 francs. The Australian and New Zealand dollars were weaker, with Aussie down 0.99 percent at $0.7408 and with Kiwi shedding 0.36 percent to $0.7101. The dollar index was last up 0.8 percent at 101.690.

In Commodities Markets  oil prices rose more than 8 percent on Wednesday as some of the world's largest oil producers agreed to curb oil output for the first time since 2008 in a last-ditch bid to support prices. The OPEC agreed to cut production to 32.5 million barrels per day, Kuwait's oil minister said. The cuts include Iraq reducing output by 200,000 bpd to 4.351 million bpd beginning in January. Non-OPEC member Russia has agreed to cut output by 300,000 bpd. U.S. WTI crude futures rose 8.7 percent to $49.16 a barrel. Brent crude futures rose $3.73 to $50.11 a barrel, a 8.0 percent gain. Crude inventories fell 884,000 barrels in the week to Nov. 25, compared with analysts' expectations for an increase of 636,000 barrels.

In US Equity Markets  gains in energy and bank stocks drove the Dow and the S&P 500 to record intraday highs on Wednesday, but losses in technology stocks dragged down the Nasdaq. The Dow Jones industrial average was up 0.3 percent, at 19,179.46. The S&P 500 was up 0.13 percent, at 2,207.49 and the Nasdaq Composite was down 0.4 percent, at 5,358.61. The S&P 500 energy sector rose 3.9 percent, after hitting a 17 month high, boosted by gains in Exxon and Chevron.  GoPro rose 3.3 percent after the wearable camera maker said it would cut 15 percent of its workforce and shut its entertainment business. Teen apparel retailer American Eagle Outfitters fell 13.5 percent after providing a disappointing profit forecast for the crucial holiday quarter.

In Bond Markets U.S. Treasury yields rose on Wednesday as the Organization of the Petroleum Exporting Countries agreed to its first output cuts since 2008, sending oil prices higher and boosting expectations of higher inflation. Benchmark 10-year notes were last down 23/32 in price to yield 2.39 percent, up from 2.30 percent on Tuesday. U.S. private employers also added 216,000 jobs in November, well above economists' expectations, a report by payroll processor ADP showed on Wednesday.

Source: Institute of Trading and Portfolio Management