Global markets lower as debt talks drag on
Global markets turned lower as worries about the US debt ceiling continued overnight.
With the US Treasury’s deadline now due within a week – on June 1 – Democrat and Republican leaders again failed to reach an agreement overnight.
US shares fell with the S&P 500 down 1.1% while the Nasdaq dropped 1.3%.
The US dollar gained as markets looked to safe havens.
Aussie hit by manufacturing PMIs
The Australian and New Zealand dollars were also weighed down by weaker manufacturing data yesterday.
Most notably, German manufacturing PMI slumped to 42.9 – a cycle low – while US manufacturing PMIs fell back below 50 – a sign of contraction.
The news saw industrial commodities lower with copper down 1.3% as it neared 2023 lows.
The AUD/USD fell 0.7%.
RBNZ due
Today’s key release is the Reserve bank of New Zealand decision, due at 12.00pm AEST.
Financial markets are evenly split with market pricing now 50-50 between a 25- and 50-basis point hike.
The NZD/USD fell 0.7% overnight.
The RBNZ might still be worried about the pace of economic growth and related inflationary pressures, but rates hikes have certainly hit house prices, with prices down more than 10% on an annualised basis.
Later, the Bank of England governor Andrew Bailey speaks, while the Federal Reserve releases the minutes from their most recent meeting at 4.00am.
Aussie back near lows after manufacturing PMIs
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 22 – 26 May
All times AEST
Have a question? [email protected]
*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
