NZ, Australia return from Easter weekend to Middle East uncertainty

New Zealand and Australian markets return from the long Easter weekend to rising oil prices and a nudge higher on Wall Street as US President Donald Trump kept the heat on Iran as the Islamic Republic rejected a ceasefire proposal.

Boeing, JPMorgan Chase & Co and American Express led the Dow Jones Industrial Index higher in late trading on Wall Street as geopolitics remained front of mind for investors, while movie theatre chain AMC Entertainment Holdings’ rally on strong Easter weekend ticket sales set a strong lead for local cinema analytics firm Vista Group International.

New Zealand fuel stocks were stable in the Ministry of Business, Innovation and Employment’s latest update on Monday, with diesel supply dipping to 51.5 days onshore and offshore.

And New Zealand’s Reserve Bank is expected to keep the official cash rate on hold when it reviews monetary policy on Wednesday, with governor Anna Breman outlining the central bank’s patient approach to the energy shock in a speech last month.

Uncertainty remains

Brent crude oil futures were up 0.8% at US$109.87 a barrel at 7am in Auckland and the Polymarket prediction market is pricing in a 29% chance of a cease between the US and Iran by the end of the month after the Islamic Republic spurned a proposal for a pause in the conflict.

Wall Street’s fear gauge, the volatility index, rose 2% to 24.34 on Monday in the US as uncertainty remained elevated after US President Trump threatened strikes on energy and transport infrastructure if the Strait of Hormuz wasn’t reopened by Tuesday.

“Markets have been largely range-bound to start the week as investors await clearer signals on whether the Middle East conflict would de-escalate or broaden,” Bank of New Zealand senior interest rate strategist Stuart Ritson said in a note.

Still, stocks on Wall Street were stronger on Monday, with the Dow up 0.3%, the S&P 500 gaining 0.4% and the tech-heavy Nasdaq Composite advancing 0.5%.

Semiconductor, internet content and banking stocks were among those pacing gains in the US, although chipmaker Nvidia was on the red side of the ledger in late trading.

Still flying

Airlines were broadly stronger on Wall Street, with gains for American Airlines, Delta Air Lines and Southwest Airlines, while United Airlines declined.

Meanwhile, AMC Entertainment surged 12% on strong Easter weekend movie ticket sales, driven by The Super Mario Galaxy Movie, while Paramount Skydance advanced 3.9% after the Wall Street Journal reported the media group secured funding from three Saudi Arabian sovereign wealth funds to back its US$81 billion takeover of Warner Bros Discovery.

Virgin Galactic surged 23% after saying it would resume suborbital commercial flights later this year, coming as NASA’s Artemis II mission flies around the far side of the moon and amid anticipation of the upcoming initial public offering of SpaceX. Local space favourite Rocket Lab gained 0.7% in late trading.

Australian futures are pointing to a 0.1% gain for the S&P/ASX 200 index when trading opens across the Tasman, while the kiwi dollar clawed back losses on Monday, trading at 57.15 US cents at 7am in Auckland from 57.19 cents on Thursday last week.

ANZ’s commodity price index is due today ahead of the Reserve Bank’s policy review on Wednesday, which is expected to keep the OCR at 2.25%. Governor Breman last month said the central bank would look through the short-term price shock from the Middle East conflict with a view to gauge whether inflationary pressures bed in over the longer term.

Reporting by Paul McBeth. Image from Fredrick F. on Unsplash.