The AUDUSD opens at 0.6148 and the NZDUSD opens at 0.6030 this morning.
Covid-19 cases continue to climb, but at a fairly steady rate, meaning we can’t call victory or defeat just yet. For now the fact that it has not gotten materially worse, has helped risk sentiment, and the AUD and NZD are both still enjoying their bounce off the lows.
New York currently has 52,318 confirmed cases with 728 deaths, and Trump has just decreed there will be no quarantine. If we start to globally see the light at the end of the tunnel, markets will move from straight “Risk on/Risk off” flows and will start looking at how countries comparatively are stacking up. You would think that the countries that go into lockdown sooner, and hence hopefully get a handle on things quicker, are going to be the ones to recover the most quickly. This does not bode that well for the US, but could be good for New Zealand, and Australia indirectly through China.
The Reserve Bank of New Zealand has said it will begin Open Market Operations, or the buying of Corporate bonds. This is a loosening of policy at the margins, and shows that Central banks do have a few more strings to their bow than just interest rates. The more bonds they buy, the more banks can lend, and hence it helps the stimulate the economy and keep corporates liquid.
Global equity markets sold off late on Friday, Dow -4.1% S&P 500 -3.4%, FTSE -5.3%, DAX -3.7%, CAC -4.2%, Nikkei +3.9%, Shanghai +0.3%.
Gold prices are off slightly to USD$1,628 an ounce. WTI Crude Oil prices are off 2.5% to $22 a barrel.