The AUDUSD opens at 0.7354 and the NZDUSD opens at 0.6979.
November 25, 2020 — 2 min read
Globally the markets are pretty heavily risk on, with bad news being good as central banks are more dovish, and good news being good as it’s a positive recovery story. Certain stock markets are at record highs, Tesla is back in business trading at $550, up modestly from $67 this time last year. Bitcoin is testing its all time high, (remember bitcoin?) and everything is rosy.
The big news came out of New Zealand yesterday, with Finance Minister Grant Robertson considering adding house prices to the RBNZ mandate. To give some background, when Covid hit the RBNZ was very worried about a sharp drop in house prices, as that would potentially put the banks at risk, hurt financial stability and drag out a recession. Therefore, they acted very aggressively with a range of stimuli. The main thing being, that they expected to make the OCR negative next year, to provide cheap funding to stop a collapse in prices. Fast forward to now, house prices have hit record highs, up 19.8% year on year nationally. Therefore if all else is equal, and the RBNZ has to take house prices into consideration, then they can’t effectively cut to make rates negative, which is less dovish and hence the jump in the NZD.
Global equity are on the charge: Dow +1.4%, S&P 500 +1.5%, FTSE +1.6%, DAX +1.3%, CAC +1.2%, Nikkei +2.5%, Shanghai -0.3%.
Gold prices are down 1.8%, currently trading at $1,805 an ounce. WTI Crude Oil prices are up 4.6% trading at $44.9 a barrel.