By Dan Bell
The NZD/USD opens stronger this morning around 0.7450 after a trading to a low of 0.7380 on Friday night.
EU sovereign bond yields continue to push higher. Italy had to pay a record 6.5% to borrow for 6 months compared to the 3.5% they were paying just over a month ago!
Standard and Poor’s downgraded Belgium’s sovereign credit rating by one notch to AA and placed them on negative outlook.
Global stocks had a mixed night with most European bourses finishing up while in the US markets finished lower with the S&P 500 off 0.4%.
Commodities were generally weaker with the CRB Index down 0.4% although oil prices were marginally higher.
France and Germany are exploring ways to speed up euro zone fiscal integration which may include bilateral agreements between member states without the need to change EU Treaties.
The NZD is marginally stronger against the major cross rates and opens around 0.7620 AUD, 0.56 EUR, 0.48 GBP, 57.70 JPY.
Not much on the local calendar this week. Today we get NBNZ Business Confidence at 3pm. Building Consents on Wednesday.
The focus will remain on Europe this week- any further developments on fiscal integration or further ECB participation will be positive for risk appetite and provide support to the NZD.
From the US we get Employment Data on Friday night which is always of interest.
Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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