Markets have closed in New York and London, so now is a good time to review how they ended the week in some key metrics for New Zealand.
Data is now updated in our daily currency and interest rate charts for the Friday close.
The headline changes are as follows:
The NZD is little changed on the day, ending at 71.3 USc, 95.3 AUc and 64.2 euro cents. The TWI-5 is now at 74.7.
These levels are similar to what we had over the past week, although they are about half a cent higher than where we ended last week.
Wholesale interest rates are a lot lower however.
In fact, from terms 4 to 10 years, they are at record lows. The 10yr swap is now just 2.66%
The two year swap fell -24 bps from Thursday and is now at 2.19%. (The record low is 2.16%.)
The rate curves has flattened. the 1-5 curve is now just +13 bps, the lowest since November 2008, and the 2-10 curve is just +47 bps, a level we were at only on June 17, seven days ago.
Risk premiums, as measured by credit default swap spreads, have jumped sharply in overnight trading.
We don’t know the impact on Australasian CDS spreads yet and this will be updated here when they come through. But the US risk premium index for investment grade corporate debt jumped by about +14% at the market close, and by +26% for the European equivalent.
Commodity pricing saw a marked reaction also.
Gold jumped US$55/oz to US$1,316/oz. Silver rose modestly. Platinum jumped US$18 to US$984/oz
Copper and other industrial metals fell in price.
On Wall Street, the S&P500 closed down -3.6%, a similar fall to the Dow. The NASDAQ closed more than -4% lower.
Equities in London fell -3%, while in Germany they were down -6.8%. In France the fall was -8%.
January 1, 2016
June 17, 2016
June 24, 2016
|2yr swap rate||2.85%||2.27%||2.19%|
|10yr swap rate||3.75%||2.76%||2.66%|
|2-10 swap curve||+90 bps||+49 bps||+47 bps|
|AU-NZ CDS index||126.7||115.4||tba|
Here is where the UK sits in the world economy, and some key metrics of how important it is to New Zealand.
|Data||data as at|
|World GDP||US$73.2 tln||2015|
|EU GDP as % of world||22.2%||2015|
|UK GDP as % of world||3.9%||2015|
|UK GPD as % of EU||17.6%||2015|
|Rank of UK GDP in World||#5||2015|
|Rank of UK GDP in EU||#2||2015|
|NZ exports to UK, NZ$ annual||$1.651 bln||Apr-16|
|of total NZ exports||3.4%|
|NZ imports from UK, NZ$ annual||$1.400 bln||Apr-16|
|of total NZ imports||2.7%|
|Visitors from UK, annual||213,000||May-16|
|of all visitors||6.5%|
|Permanent migrants from UK, annual||3,942||May-16|
|of all migrants||5.8%|