Morning Report

Morning Report PDF (PDF 256KB)

Key themes:

• Markets were broadly stable overnight, despite US President Trump downplaying expectations of an immediate agreement with Iran, stating he was "not satisfied" with negotiations and that no one nation would control the Strait.
• Brent crude oil prices managed to fall another -4.7% to US$94.93/bbl, providing a backdrop for equities to largely tread water overnight, and for yields and the USD to remain broadly stable.
• Most of the action occurred during yesterday's local trading. Australian headline inflation came in slightly softer than expected, sparking a rally in ACGBs as markets moved to effectively rule out the chance of a July RBA hike, while the AUD softened.
• Meanwhile, a 'hawkish hold' from the RBNZ drove a strong bid for the Kiwi. Ultimately, the AUD/NZD collapsed -1.5%, its largest single-day move since October 2017, pulling the cross down sharply off its 13-year high.