NZD: NZD Falls On Tariffs Headlines, Consumer Confidence Edges Lower
Jan-30 22:06
- The NZD/USD is 0.40% lower at 0.5633, steadying somewhat after hitting a low of 0.5623 following more Tariff headlines, Trump said there will be a 25% Tariff imposed on both Canada & Mexico, while he also mentioned there will be tariffs on China.
- The kiwi has broken back below the 20-day EMA, while momentum is turning bearish again with the MACD almost back to neutral, while the RSI indicator is now at 45. Initial support is now 0.5580 (Jan 19th lows) with a break opening a move to test the YTD lows of 0.5545 (Jan 12). Resistance is the 50-day EMA at 0.5717.
- The NZ-US 2yr swap is ticking lower again, after a 30bps move higher in Jan, we are 11bps off those levels now at -77bps.
- New Zealand’s consumer confidence fell to 96.0 in January, down from 100.2 in December, marking a 4.2% MoM decline. This reverses December’s slight gain and is the weakest reading since October. Households remain cautious, with weaker perceptions of family finances (-17 vs. -14 YoY) and a drop in economic outlook (1-year ahead: -15 vs. -12, 5-year ahead: 5 vs. 7). While the willingness to buy major household items plunged to -16, a sharp decline from -1 in December, signaling weaker consumer spending.
- There is little change to RBNZ dated-OIS with the market pricing in a 97% chance of a 50bps cut at next months meeting, with another cut priced in by April and a cumulative 123bps priced through to November.
- No large nearby strikes Fri, upcoming notable strikes: 0.5700 (NZD379.1m Feb. 5), 0.5900 (NZD350m Feb. 5)
- The calendar is empty for the rest of the day, with focus turning to building permits on Tuesday and Employment data on Wednesday
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US TSYS: Tsy Curves Look To Finish 2024 at June'22 Highs
Dec-31 19:18
- Treasuries look to finish the last trading session of 2024 lower after reversing Tuesday morning support. Markets closed Wednesday for New Years day, resume full trade Thursday.
- The Mar'25 10Y contract trades 108-25.5 (-5.5) late in the day, 10Y yield near session high of 4.5871%. Curves bounced off flatter levels, 2s10s climbing to 34.344 -- the highest level since June 2022.
- Short end support, in turn, helped projected rate cuts into early 2025 gain momentum vs. late Monday levels (*) as follows: Jan'25 steady at -2.8bp, Mar'25 -14.6bp (-13.6bp), May'25 -20.6bp (-19.5bp), Jun'25 -29.8bp (-28.8bp).
- No substantive reaction to this morning's housing and regional Dallas Fed services activity data. Looking ahead to Thursday data (prior, est): Initial Jobless (219k, 221k) and Continuing Claims (1.910M, 1.890M) at 0830ET; S&P Global US Manufacturing PMI (48.3, 48.3) at 0945ET; Construction Spending MoM (0.4%, 0.3%) at 1000ET.
- Treasury supply: $85B 4- & $80B 8W bill auctions at 1130ET, $64B 17W bill auction at 1300ET.
COMMODITIES: WTI Futures, Gold Holding Higher
Dec-31 18:47
WTI futures are trading higher today as the contract extends recent gains. A stronger reversal to the upside would refocus attention on key short-term resistance at $76.41, the Oct 8 high. Initial firm resistance is unchanged at $71.97. A bear threat in Gold remains present. The yellow metal traded sharply lower on Dec 18 and the move undermines a recent bull theme. A resumption of weakness would open key support at $2536.9, the Nov 14 low.
- WTI Crude up $0.9 or +1.27% at $71.88
- Natural Gas down $0.32 or -8.13% at $3.618
- Gold spot up $19.24 or +0.74% at $2625.86
- Copper down $6.95 or -1.7% at $402.3
- Silver down $0.1 or -0.34% at $28.8383
- Platinum up $3.96 or +0.44% at $908.02
US STOCKS: Late Equity Roundup: Tech & Interactive Media Sectors Underperforming
Dec-31 18:36
- Stocks are trading near session lows after reversing early session gains. Though off this year's record highs (SPX Eminis 6178.75, DJIA 45,073.63, Nasdaq 20,204.58) major averages will finish the year with double digit gains: SPX Eminis +19.5%, DJIA +13.1%, while the Nasdaq gained 29.9%!
- Currently, the DJIA trades down 92.19 points (-0.22%) at 42474.46, S&P E-Minis down 28 points (-0.47%) at 5929.75, Nasdaq down 147 points (-0.8%) at 19337.13.
- Information Technology and Communication Services shares underperformed continued to underperform late Tuesday, shares of software and semiconductor makers weighing on the tech sector: Nvidia -1.61%, Advanced Micro Devices -1.36%, Crowdstrike Holdings -1.28%.
- Interactive media and entertainment shares weighed on the Communication Services sector: Alphabet -0.9%, Live Nation -0.76%, Netflix -0.60%, Meta -0.41%.
- On the positive side, Energy and Materials sectors outperformed in the second half, oil & gas stocks buoyed the Energy sector as crude prices continued to rise (WTI +1.0 at 71.99): APA Corp +3.59%, Marathon Petroleum +2.46%, Occidental Petroleum +2.15%.
- Meanwhile, shares of chemical & fertilizer makers supported the Materials sector: Mosaic +2.44%, Celanese +1.42%, Dow +1.37%.
- Looking ahead, the next round of quarterly earnings kicks off mid-January with Blackrock, Bank of NY Melon, Wells Fargo, JP Morgan, Goldman Sachs, Citigroup, US Bancorp, M&T Bank and PNC all reporting between January 13-16.
