An update of where major markets ended the week following the UK vote to leave the European Union, as they affect New Zealand

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
NZD:USD 0.6829 0.7053 0.7126
TWI-5 73.55 73.77 74.71
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
Gold, US$/oz $1,063 $1,262 $1,316
NZX50 6324 6847 6668
ASX200 5296 5163 5114
S&P500 2044 2071 2037
Shanghai composite 3539 2885 2854

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 $1.651 bln Apr-16
     of total NZ exports 3.4%  
     Rank #5  
NZ imports from UK, NZ$ annual $1.400 bln Apr-16
     of total NZ imports 2.7%  
     Rank #10  
Visitors from UK, annual 213,000 May-16
     of all visitors 6.5%  
     Rank #3  
Permanent migrants from UK, annual 3,942 May-16
     of all migrants 5.8%  
     Rank #4