HiFX Morning Update, November 10 2016

HiFX Morning Update, November 10 2016

NZDUSD 0.7282 -0.5%
NZDEUR 0.6655 0.3%
NZDGBP 0.5855 -0.9%
NZDJPY 76.59 0.0%
NZDAUD 0.9538 0.5%
NZDCAD 0.9771 -0.2%

The NZDUSD opens at 0.7282 (mid-rate) this morning.

Extreme volatility gripped both the equity and currency markets yesterday as US election poll results were announced. The NZD which had traded to new recent highs against all its rivals, fell sharply as risk appetite collapsed. This morning the RBNZ is expected to cut the OCR by 25 basis points to 1.75% and direction for the NZD will be governed by the accompanying statement. With this cut fully priced in we believe that unless an easing bias is clearly signalled there is a very good chance the NZD will appreciate.

Surprisingly global equity markets have staged a remarkable comeback, The Dow Jones Futures were at one point down 700 points and yet as I type they are up 163 points (+0.91%) from the open. The one thing all economists can agree on is that after this shock election result volatility is here to stay.

Global equity markets are mixed - Dow +0.91%, S&P 500 +0.86%, FTSE +1.00%, DAX +1.56%, CAC +1.49%, Nikkei -5.36%, Shanghai -0.62%.

Gold prices are unchanged trading at $1,277 an ounce WTI Crude Oil has gained 2.9% overnight currently trading at $45.60 a barrel.

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