Morning wrap (27.11.2024)

Asia-Pacific indices are trading mixed. Chinese indices are gaining between 0.90-1.20%. Meanwhile, Japan's Nikkei 225 index is down 0.65% to 38,060 points, while Singapore's SG20cash futures are up 0.07%.

On the forex market, the Japanese yen and New Zealand dollar are the biggest gainers in the first part of the day, following the RBNZ's decision on interest rates. The US dollar is consolidating with no significant changes, while the USD/JPY pair is down 0.55% to 152.2000.

The New Zealand dollar is performing strongly today despite the Reserve Bank of New Zealand (RBNZ) cutting the official cash rate by 50 basis points to 4.25%, as expected. The bank also indicated another 50 basis point cut would follow in February.

This may reflect investor surprise at the less aggressive pace of rate cuts, as there had been speculation about a 75-basis-point cut prior to the announcement.

Moreover, RBNZ Governor Adrian Orr warned that high international borrowing costs mean mortgage holders may need to adjust their expectations regarding exceptionally low interest rates. During the press conference, Orr addressed the misconception that RBNZ’s forecasts suggest a slower pace of rate cuts.

He emphasized that the RBNZ's projections are consistent with previous assumptions. Orr also noted expectations of greater price volatility due to geopolitical factors, indirectly referencing Donald Trump’s tariff policies.

Gold is up 0.45% in the first half of the day, trading at $2,645 per ounce, while silver is 0.62% higher, trading at $30.60 per ounce.

WTI crude oil is down 0.30% today to $68.70 per barrel.

US President Joe Biden has announced that a ceasefire has been agreed to end 13 months of fighting between Israel and Hezbollah in Lebanon. The fighting on the Lebanese-Israeli border will end from 04:00 local time tomorrow (02:00 GMT on Wednesday). Biden stressed that this will be a permanent cessation of hostilities.

Despite this, Israeli Prime Minister Benjamin Netanyahu said that Israel would not hesitate to respond to a possible breach of even part of the agreement by Hezbollah.

On the cryptocurrency market, there is a slight rebound following yesterday’s sharp declines. Bitcoin is up 1.35% to $93,200, while Ethereum is seeing stronger gains, up 3.00% to $3,425. The current correction from Bitcoin's peak is already close to 10% at its lowest point.