Losses for G10 majors were broad based, especially NZD (:confused:). Substantial weakness also now - in some emerging market currencies. ..
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No, National victory has not been priced in at all - in fact, yesterday's market action could even be construed as market disliking/ disapproving of National win. :p
None of all the other good news that's been happening, has been price in either IMO. What you see is momentum from yield increase in long-dated US securities...
Some pretty big moves in benchmark bond rates globally, courtesy of "higher for longer" sinking in...
5-year Treasury moved as high as 4.937%, its top level since 2007.
10-year Treasury yield breaks above 4.9% for the first time since 2007 https://www.cnbc.com/2023/10/18/us-t...omic-data.html
30-year fixed mortgage rate just hit 8% for the first time since 2000 https://www.cnbc.com/2023/10/18/30-y...ince-2000.html
At least I try. God loves a trier. Have patience... all good things come to those who wait :)
Are you guys trading this pair or thinking longer-term / hedging?
Anything under 60c is great selling/hedging IMO. Look at the long-term chart.
The Chinese economy expanded by +4.9% in Q3-2023 from a year ago, slowing from +6.3% in Q2 but beating market forecasts of +4.4%. For a country as large as China, that is a big up surprise. Retail sales climbed by +5.5% in September from a year ago (remembering they essentially have zero inflation), accelerating from a +4.6% rise in the prior month and exceeding market estimates of +4.9%. It was the largest increase in the pace of trade since May. Electricity production rose +7.7% from a year ago, suggesting the headline growth may in fact have some substance behind it. It is the first time in quite some time Chinese growth data has been led by electricity production.
If NZD is proxy for Chinese growth, has this been priced in?
Attachment 14798https://www.sharetrader.co.nz/image/...AAAElFTkSuQmCC
What about this? Has the Baltic Dry Index reversion to mean been priced in? I don't think so... but the market is always right, isn't it? :)
Excerpt From Taking Stock 19 October 2023:
In the US, the annual deficit this year is forecast at $1.5 trillion.
Paying interest to the bondholders, many of whom are offshore, will eat around 14% of the US total tax take.
The NZ interest expense will be nearer 7%.
It is not only governments that will be fretting over the high cost of debt.
At least US $425 billion of low-grade corporate debt (referred to as “junk” debt, sometimes) must be refinanced in the next 24 months.
The current cost of that debt is around 9.25%, nearly 4% more than has been the case in most of the last seven years...
Globally, higher interest rates are an unaffordable proposition for governments because they have already grossly over-borrowed, just as our government has done. So have many property syndicators...
Powell must choose his words well tonight and in the next few weeks, lest they prove to be the proverbial "last straw"...
Our trade balance is horrendous ......miles away from historical levels
That must be a drag on nzd?
Why should he have raised rates?
The banks did that independently by increasing their margins.
Many home owners will be on the brink with the new rates & 40% of the market is yet to roll onto the new rates so the full impact of the current rates hasn't been felt yet.
Inflation is slowly coming down.
If they had increased rates twice like you suggested it would have hurt exporters and home owners & the economy would be in a downward spiral.
When you are at the margins of pain like we are now with interest rates, every little move from there can have a much more significant impact.
If NZ hadn't imported 100,000 people the economy would be in a lot worse shape as well.