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In central bank activity seen overnight, the Reserve Bank of New Zealand opted to hold its interest rates at 2.5 percent at its latest monetary policy meeting, with comments from the bank’s governor (Bollard) who said that rate policy will need to be kept accomodative in light of this year’s slowdown in growth. There were some changes in the policy statement, however, as there was no mention that the bank feels the New Zealand Dollar (which had been referenced in the previous statement) and…Continue
Equity markets in Asia are lower with the MSCI stock index falling from its highest levels in two weeks after a disappointing bond auction in Spain showed some indication that markets are questioning the validity of this weekend’s bailout agreement with the Eurozone finance ministry.
The MSCi dropped by 0.9 percent to trade just above the 110 level, with 80% of the stocks in the index trading lower on the day. Market speculation that the debt situation in Eurozone is weighing on…Continue
In Forex markets, the US Dollar denominated pairs stabilized overnight, with the USD holding on to most of its gains and the Euro, GBP and AUD continuing to trade near their recent lows. Trading volumes remained thin with the UK holiday keeping many investors on the sidelines but the general tone in markets remains cautious at best (strongly negative at worst), and this is only being propelled by economic data which showed that services PMI in Germany dropped to 51.8 for the month of May,…Continue
High yielding currencies were lower during the last few sessions, propelled in part by disappointing growth figures out of the UK. First quarter GDP numbers in the UK were lower than market expectations (largely on weakness seen in the construction sector). This brought sellers into the British Pound as analysts will ramp up their arguments now for why the Bank of England (BoE) is likely to re-introduce their quantitative easing program (in the form of government bond buys).