S&P 500 — US Large Cap Index
FTSE 100 — UK Blue Chips
Euro Stoxx 50 — Eurozone Leaders
DAX 40 — German Equities
CAC 40 — French Market Index
Nikkei 225 — Japan Benchmark
Hang Seng — Hong Kong Index
Shanghai Composite — China Mainland
ASX 200 — Australian Market
TSX Composite — Canada Index
Nifty 50 — India Large Cap
STI Index — Singapore Market
KOSPI — South Korea Index
Bovespa — Brazil Equities
JSE Top 40 — South Africa Index
IPC Index — Mexico Market
ING strategist Francesco Pesole notes that the New Zealand Dollar is the best-performing G10 currency since early week, boosted by last week’s RBNZ rate hike and hawkish repricing. He says FX markets are rewarding currencies with scope for further domestic tightening, beyond commodity exposure. However, he judges current pricing of 60bp additional RBNZ tightening as too aggressive and expects AUD to regain ground versus NZD if tensions ease.
Kiwi leads G10 on RBNZ repricing
“The Kiwi dollar is the best-performing currency in the G10 since the start of this week, riding the wave of last week’s hawkish repricing after an RBNZ rate hike.”
“It’s a testament to how the FX market is very keen to reward currencies that can offer flexibility on the hawkish side for domestic central bank pricing, not just the positive commodity exposure (like for CAD, NOK, AUD).”
“Still, markets are now pricing in 60bp of tightening by year-end in New Zealand, which looks a bit too aggressive before seeing 2Q CPI, which is released on 20 July.”
“AUD should recover some ground over NZD should this escalation fail to defuse.”
