Oil and gold both fall as market fears ease

Share Markets: 

Equity markets shrugged off the recent geopolitical concerns over the weekend from Turkey and France and hit new record highs. Additionally, there was little major news affecting markets.

The Dow rose 0.1% and the S&P500 lifted 0.2% over the session.

Interest Rates: 

The improvement in risk appetite helped drive treasury yields higher. US 10-year yields rose 3 basis points to 1.58%.

There was little change in Australian bond yields based on futures.

The 3-year yield was left unchanged at 1.51%, while the 10-year yield fell 1 basis point to 2.00%. 

Despite the improvement in risk appetite, investors are probably wary of weak domestic inflation data due next week.

Foreign Exchange:

The US dollar index ranged sideways after gaining in the previous session, but the dollar was stronger against the yen on the improvement in risk appetite and talk of stimulus from Japan.

GBP strengthened on comments by BOE policymaker Weale who said that he was unsure whether he would support an interest rate cut at the next August meeting.

The kiwi weakened after CPI data was weaker than expected, and the RBNZ said that it will place restrictions on home lending.

The Australian dollar was range bound, and failed gain on the improvement in sentiment. It is likely concerns over weak inflation are keeping a lid on the AUD, after a weak reading on NZ CPI data.


An easing in risk aversion saw gold prices weaken. Oil prices also fell as rising stockpiles saw concerns lift of a renewed glut.


No major economic data to report.


Home prices across 70-major cities rose 0.8% in June, slowing slightly from a 0.9% increase in May.

However, prices were up 7.3% in the year to June, up from an annual increase of 6.9% in May.

There continues to be a wide range of housing conditions with strong gains in first-tier cities and weakness in the smaller cities.

A large stock of unsold homes is expected to place downward pressure on prices.

New Zealand:

Consumer prices were a little softer than expected, rising 0.4% in Q2, after rising by 0.2% in Q1.

Price pressures are intensifying in new home building, but remain muted in the rest of the economy. For the year to Q2, CPI rose 0.4%, an unchanged pace of growth from Q1.

The CPI outcome strengthens the case for an interest rate cut by the Reserve Bank of New Zealand.

The performance of services index eased to 56.7 in June, from 56.9 in May.

The index remains above 50 indicating ongoing expansion in services sector activity.

United States:

The NAHB housing market index edged down one point to 59 in July from 60 in June, but remains relatively high, and suggest home builders are still upbeat.