The RBNZ, New Zealand’s central bank, cut its overnight rate by 50bps (from 5.25% to 4.75%), a more aggressive adjustment than what was anticipated. New Zealand’s annual GDP growth turned negative recently, going from 1.50% a year ago to -0.50% in the latest report. The New Zealand dollar sold off in the wake of the cut and is -1.22% today vs. the USD, the biggest decline among G10 currencies.
The USD is higher against all G10 in trading today, following U.S. treasury yields which have moved higher in all tenors. The 10-year yield is at 4.044%, its highest point since late July.
The U.S. Dollar Index basket of currencies is +0.18% today, its 8th consecutive daily gain, and is +2.35% since September 27th.
The surge in treasury yields has weakened demand for gold. Spot gold reached a record $2,685.42/oz. on September 27th and is trading at $2,609.79/oz. today, a 2.82% decline from its peak. Despite the recent selloff gold is +26.46% YTD and silver is +27.54%YTD, among the best-performing commodities this year.
U.S. CPI (consumer inflation) data is set for release tomorrow and PPI (producer inflation) is due for release on Friday.
