Originally published by Rivkin Securities
The US 10-year yield hit 3.0% overnight with an auction of new 10-year bonds selling for a yield of 2.995%. The market was generally buoyant on news that talks with North Korea appear to be going well as evidenced by the release of US citizens that had been held captive there. The risk-on sentiment eventually spread to stocks with the Dow Jones Industrial Average climbing 0.75% and the S&P 500 just shy of 1.0%.
Oil prices continue to climb with WTI surpassing US$71 per barrel. The release of inventory information showed that crude stockpiles fell more than expected last week which, coupled with a decline in gasoline inventories, provided a bullish catalyst for oil prices. The implications of the withdrawal of the US from the Iran deal are also dawning on the oil market.
The NZ central bank decided to keep rates on hold at 1.75% this morning and signalled that rates would be staying at this level for the foreseeable future. Later this evening the Bank of England will decide interest rates at its monthly meeting. Market expectations are for no change in rates of 0.5% although two of the nine voting members are expected to dissent and vote for a rate hike.
Data Releases:
- UK Manufacturing Production 6:30pm AEST
- UK Interest Rate Decision 9:00pm AEST
- US CPI 10:30pm AEST