NZD punches back above US$0.59 amid risk off mood

Key Movers

There is plenty to digest this morning after a risk off move enveloped markets overnight. New Ukraine had fired a series of long-range missiles into Russia and reports President Putin had upgraded Russia’s nuclear doctrine enabling Russia to utilise its vast nuclear arsenals against non-nuclear states supported by nuclear powers. The fear of another escalation in tensions in Europe’s east pushed investors toward haven assets and cleaved through FX and equity markets. The USD and JPY lurched upward with the DXY index moving back through 106.50 before the Russian Foreign Minister helped assuage fears stating, “We are strongly in favour of doing everything possible not to allow nuclear war to happen”. As calm was restored to markets investors set about retracing the day's earlier moves and most majors opened this morning in much the same positions as yesterday. The Canadian dollar was the day's strongest performer up 0.33% following its CPI data print. Headline CPI rose faster than anticipated in October rousing doubts as to whether the Bank of Canada will apply another 50-point cut before year-end. Markets are now pricing a 30-point adjustment before year-end suggesting analysts are divided between a 25- and 50-point adjustment.
Our attention now turns to UK CPI inflation data, Euro Area wage data, and the latest US treasury auction.