The New Zealand dollar tumbled and stocks on Wall Street dipped as investors pared their bets on a rate cut by the Federal Reserve after perkier increases in producers' prices prompted a rethink on US inflation.
Bitcoin drifted off its heady highs after US Treasury secretary Scott Bessent said he doesn’t have any plans to boost the federal government’s crypto reserves, while the newly-listed crypto exchange Bullish rallied for another day after its mammoth debut.
Shipping giant Hapag-Lloyd sank after warning of a slowing in global trade through the rest of the year as US President Donald Trump’s tariff regime bites into demand and ongoing tensions in the Red Sea make for longer voyages.
And oil prices climbed as Trump warned of severe consequences for Russia if his talks with Vladimir Putin on the Ukraine war don’t pave a pathway to peace.
Flightless bird
The kiwi dollar was broadly weaker after US producer prices rose more than expected, prompting traders to pare their bets on a rate cut by the Federal Reserve next month.
“The data were consistent with higher tariffs driving higher inflation amongst businesses, even if that has yet to be felt by consumers, with the figures contrasting with the more muted CPI figures published earlier this week,” Bank of New Zealand senior markets strategist Jason Wong said in a note. “While US rates rose after the release, the market still thinks there is a high chance of a rate cut next month, with 23 basis points priced, although the risk of a jumbo 50 basis point move was evaporated.”
The local currency dropped to 59.14 US cents at 7am in Auckland from 59.76 cents yesterday, slipped to 91.06 Australian cents from 91.23 cents, declined to 50.80 euro cents from 51.07 cents, and decreased to 43.70 British pence from 44.02 pence.
Stocks on Wall Street were a touch softer after the producer price data were released, with the S&P 500 marginally lower, while the Dow Jones Industrial Average slipped 0.1%, led by declines for Home Depot and 3M.
Amazon was among the leaders on the blue-chip index, rallying for another day after ramping up its same-day delivery of fresh groceries in the US.
Deere John
Farm equipment-maker Deere sank 6.5% after reporting a decline in June quarter profit and revenue, and cut its annual outlook as it braces for increased costs on US President Donald Trumps’ tariff regime.
The US initial public offering market continued to show off its buoyancy, with Miami International Holdings – better known as MIAX – climbing 31% on its debut. The firm operates nine securities and derivatives and derives most of its revenue from options trading, which has exploded since the covid-19 pandemic and meme stock flurry in 2021.
Newly-listed crypto exchange Bullish climbed 8.2% as it extended its rally from this week’s debut on the New York Stock Exchange, when the stock surged more than 80%.
Meanwhile, Bitcoin drifted off its recent highs, falling 3.8% to US$118,150 after US Treasury secretary Scott Bessent said the federal government doesn’t plan to buy more crypto for its strategic reserve, which current holds between US$15 billion and US$20 billion in digital assets.
European green
Across the Atlantic stock markets were stronger with the UK’s FTSE 100 up 0.1%, while Germany’s DAX 30 and France’s CAC 40 both advanced 0.8%, with defence companies and financial firms leading the charge.
Global shipping firm Hapag-Lloyd dropped 8.4% after it said demand might taper off through the rest of the year as Trump’s tariff regime puts off trade movements and as vessels continue to take longer routes with the Red Sea still under threat from Houthi militia.
Oil prices nudged up with Brent crude futures rising 0.1% to US$66.93 a barrel ahead of Trump’s meeting with his Russian counterpart Vladimir Putin, where the leaders will seek to map out a peace plan to end the Ukraine war. Trump has warned of severe consequences if the talks fail.
Australian futures are pointing to a 0.1% decline from record territory for the S&P/ASX 200 index when it opens.
Local data today include the BNZ-Business NZ performance of manufacturing index, and Statistics New Zealand’s partial inflation reading for July.
Earnings season takes a breather in New Zealand, with a flurry of results scheduled in the next two weeks.
Reporting by Paul McBeth. Image from Priyanka Thakran on Unsplash.
