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Markets show tentative signs of recovery

Investors are bargain-hunting across the financial markets this morning, scooping up discounted assets after a multi-week selloff. Futures on North American equity markets are pointing to gains after the open, Treasury yields are inching higher, and economically-sensitive currencies are outperforming their safe-haven brethren amid a broader improvement in risk appetite. The Canadian dollar remains narrowly rangebound after yesterday’s inflation figures failed to alter expectations for the Bank of Canada to keep rates on hold for the rest of the year. After delivering an aggressive 200 basis points in easing over the last two years, the Bank has landed near what...

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NZD: RBNZ (slowly) shifting course

After delivering an aggressive series of interest rate cuts over the past ~18-months in a bid to revive NZ’s economic fortunes, it wasn’t a surprise to see the Reserve Bank of NZ hold the Official Cash Rate steady at 2.25% today. Rather, the focus was on the RBNZ’s updated thinking about the outlook, especially as this was also new Governor Breman’s first meeting in charge. The RBNZ provided a balanced assessment of how things are unfolding with less policy ‘accommodation’ and interest rate increases now projected from Q4 2026/Q1 2027. According to the RBNZ, the “NZ economy is at an...

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RBNZ in focus

• Choppy markets. Intra-session swings overnight. Positive steps between US/Iran help sentiment. AUD & NZD tick a bit higher in quiet trading.• Macro events. RBNZ today. No change in rates expected. New forecasts released. AU wages out today ahead of the monthly jobs report tomorrow. Global Trends Markets were choppy overnight with intra-session swings translating to only limited net changes. For example, after falling by nearly 1% at the open on the back of lingering AI uncertainty, the US S&P500 clawed its way back into positive territory (+0.1% over the day). In bonds, US yields edged a fraction higher (+1-3bps...

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Currency traders seek safe havens as turbulence continues

Good morning. Risk aversion is dominating markets as trading resumes after yesterday’s North American holiday. The dollar and safe-haven yen are extending their gains, two-year Treasury yields are sliding toward three-year lows, and equity futures are pointing to a weaker open as investors brace for a continuation of last week’s rotation away from AI-exposed businesses. Oil prices are slightly higher on reports that Iran has closed parts of the Strait of Hormuz for military exercises. Here in Canada, inflation pressures eased more than expected last month. Data released by Statistics Canada this morning showed the headline consumer price index climbing...

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Aussie jobs data & RBNZ in focus this week

• US CPI. Cooling US inflation helped stabilise risk sentiment. US bond yields dipped. USD tread water, as did the NZD. AUD drifted a bit lower on Friday.• Event radar. US holiday tonight. Lunar New Year started. RBNZ meets this week (Weds). US GDP (Fri night AEDT) & AU jobs data also out (Thurs). Global Trends There was a mixed performance across markets at the end of last week with encouraging US inflation data in the driver’s seat. US equities stabilised on Friday after the previous sessions tech/AI-led selloff. Nevertheless, the S&P500 still recorded its 4th, albeit small, decline in...

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