EUR/USD, USD/JPY, NZD/USD flows - still looking to tech and oil; NZ election
Some bounces but Nasdaq remains heavy
Oil says capped as post election strikes unlikely
NZ election results seen favouring National party
Still oil and tech very much centre of the market’s radar as we start the new week. Asia not all one way with Taiwan seeing a bit of a bounce, but Kospi still soft and Nasdaq likewise – latter failed to hold the attempt to regain the Aug range break and is off just under 1% today so still not a great structure at present. Nvidia also under scrutiny and potential pressure out of reports the CEO was subject to an internal investigation over whether he had been a target of foreign intelligence operations.
Some geopolitical positives though with oil remaining on retreat after Trump suggested ‘the answer is, highly unlikely it's going to be necessary' regarding fresh strikes, although contextualised as ‘depends on whether or not they sign a very strong agreement’. Vague though it might be it does support the market’s increased confidence that out of Israel and US elections the mooted post event strikes strategy is parked in favour of more engagement. US crude off around $1 though well inside the range for post-election trade.
For all the background noise, it remains relatively orderly and anchored on the FX side, with EUR/USD still not very far away from 1.12 all said and done and USD/JPY likewise in familiar territory on and around 158.
NZD the one main standout overnight, benefiting from not only some ease back in volatility but the election results taking shape where preliminary results look to be favouring the National party to head up the next government and a contained coalition (more borderline), the market’s kiwi preference from a fiscal and monetary policy framework perspective.