The government is set to make a major announcement on the response to coronavirus today. Photo / File
The government is set to make a major announcement on the response to coronavirus today. Photo / File
Volatility remains off the charts with Wall Street down around 9 per cent as markets continue to grapple with the ramifications of covid-19. The kiwi dollar meanwhile could be heading to parity against the Aussie.
The Dow Jones Industrial average was down 9.6 per cent, while the Nasdaq was down8.9 per cent and the S&P 500 was also down 9 per cent at 8am in Wellington.
Stocks in the US were pounded after the US Federal Reserve's move to cut rates by 100 basis points and resume money printing yesterday amplified fear about the impact of the virus.
Trading on Wall Street was again halted for 15 minutes shortly after the open when the S&P 500 index crossed the 7 per cent threshold.
The US and other nations continued to increase measures to contain the virus. Bars, restaurants and movie houses were ordered shut in New York and Los Angeles and Canada closed its borders to everyone except US citizens.
In the US, Airlines for America, which represents American Airlines, United Airlines and Delta Airlines among others, is seeking a US$50 billion government bailout, Reuters reported.
In New Zealand, all eyes will be on the government's multi-billion fiscal stimulus package to be announced early this afternoon. A bail-out for Air New Zealand is looking likely as it laid the groundwork yesterday to shed 30 per cent of its staff. The airline is 52 per cent-owned by the government.
Air New Zealand remains on a trading halt. Other stock that are on the front line of the tourism sector are likely to remain under intense pressure but could see some relief if the government offers some targeted support.
The government is due to make the announcement at 2pm today.
Meanwhile, the kiwi dollar was trading at 60.49 US cents at 8am in Wellington from 60.50 US cents at 5pm in Wellington.
However, it was at 98.86 Australian cents after touching a high of 99.70 cents overnight.
"Expectations that the RBA will jump on the coordinated central bank bandwagon has prompted calls for the long-hyped parity party," said Kiwibank trader Mike Shirley.
On Monday, the RBA said financial regulators and the Australian government are working closely to ensure that Australia's financial markets continue to operate effectively and that credit is available to households and businesses.
It also said "the bank will announce further policy measures to support the Australian economy on Thursday."
ANZ Bank also noted the kiwi dollar came close to parity with the Aussie overnight, "but perhaps don't break out the bubbly just yet – it's a cross we could really do with having lower in support of the economy".
The risk of a pop higher short term is very real, it said.
