US mortgage applications up 25%, US keeps its triple-A rating, US crude inventories rise more than expected, NZD strengthens; UST 10yr yield 2.07%; NZ$1 = 66.2 US¢, TWI-5 = 70.6

Here’s my summary of the key events overnight that affect New Zealand, with a particular focus on the US.

US borrowers rushed to their lenders last week, amid anxiety over new mortgage regulations and following the Fed’s decision not to raise interest rates.

Mortgage Bankers Association data shows mortgage applications increased by more than 25% last week, compared to the previous week.

While this is a significant increase, mortgage application volumes are still running historically low.

Moody’s rating agency has upheld the US’s triple-A rating, citing strong GDP growth and the status of the US dollar as the global reserve currency benchmark.

Moody’s, which has never changed the US’s rating, indicated its stable outlook means the rating isn’t likely to change over the next 12 to 18 months.

However it’s noted a downgrade could occur within the next 10 years if fiscal policy doesn’t change and US budget deficits and the debt ratios increase.

Oil prices seesawed overnight, closing slightly higher than the previous day.

The volatility was sparked by the released of a US Energy Information Administration report, which shows US crude inventories rose much more than expected last week, as refiners reduced inputs and idled capacity.

This rise in stocks more than offset the fall in crude exports the US reported last week.

The US benchmark oil price is now just below US$49/barrel, while Brent crude is at US$51/barrel.

The gold price is down slightly to US$1,143/oz.

In New York, the UST 10yr yield benchmark has inched higher to 2.07%.

The New Zealand dollar has settled, after spiking against all the major currencies overnight.

It’s still up nearly a cent compared to this time yesterday, to 66.2 US¢. It’s settled at 91.7 AU¢, after reaching 92.1 AU¢, and is up 7 bps to 58.8 euro cents. The TWI-5 is up to 70.6.

Yesterday’s favourable GlobalDairyTrade auction result and a supposedly good outcome from Trans-Pacific Partnership negotiations have prevented the New Zealand dollar from weakening in the same way other currencies have.

If you want to catch up with all the local changes on Wednesday, we have an update here.

The easiest place to stay up with event risk today is by following our Economic Calendar here »

Daily exchange rates

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for(i=0;i

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