US equity markets rebounded strongly overnight, despite the US Government shutdown, as did the US Dollar. The EUR crashed back to 1.1600, while the GBP slumped to 1.3370. Gold continued to post record levels, surging through USD$4,000, considered a safety move, but also a reflection of the ‘fiat’ currency value. Political problems continue to dog markets both sides of the Atlantic.
The RBNZ surprised markets with a 50 basis point rate cut to the OCR. Markets were expecting a cut, but the magnitude was the surprise. The RBNZ citied weak economic conditions, which most suffering the recessionary economic conditions, were well aware of. This was a desperate action, offering monetary stimulus, to a terrible fiscal economic situation. The NZD slumped as a result, tumbling to 0.5750, while the AUD trades below 0.6600.
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