Local equities may get a sentiment boost from a positive night on Wall Street and the local multi-billion stimulus package announced yesterday.
The Dow Jones Industrial average was up 3.8 per cent at 8am in Wellington, while the Nasdaq was up 5.1 per cent and the S&P 500 was up 4.8 per cent.
"Global markets rallied overnight following the massive fall the previous day, with volatility still very high," ANZ Bank said.
The mood on Wall Street improved after the US Federal Reserve acted to ensure companies can continue paying workers and buying supplies through the coronavirus epidemic. It restarted a programme it used to backstop key financial markets during the 2007 to 2009 crisis, Reuters reported.
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ANZ Bank said liquidity was boosted by the approval for a US$10 billion programme for the Fed to buy short-term corporate debt. The UK has also announced it will provide 330 billion pounds, equivalent to 15 per cent of gross domestic product, to support companies.
Domestically, Finance Minister Grant Robertson announced $12.1 billion to soften the impact of covid-19.
The package is the equivalent of 4 per cent of GDP and is a mix of wage subsidies, tax breaks, increased welfare support, and targeted spending in health and aviation.
Yesterday's package may provide some further support to the local stock market as firms take on board the measures aimed at keeping businesses afloat. The S&P/NZX 50 Index declined 0.4 per cent yesterday after earlier falling as much as 5 per cent.
Investors will continue watching for any news on the government's plans for Air New Zealand. The government's $600 million aviation package specifically excluded support for the national carrier but talks are underway. Late yesterday an Air New Zealand spokesperson said they were unable to provide any details.
The kiwi, meanwhile, fell to a fresh 11-year low at 59.13 US cents earlier today. It was at 59.38 cents at 8am in Wellington. Already under pressure, it was not helped by a fall in dairy prices in the overnight Global Dairy Trade auction.
The GDT price index fell 3.9 per cent from the previous auction two weeks ago. The average price was US$2,980 a tonne, compared with US$3,112 a tonne two weeks ago.
Whole milk powder retreated 4.2 per cent to US$2,797 a tonne.
"Clearly the onset of coronavirus stalled the upward trajectory in global dairy prices visible in late 2019 and the corona hangover continues as evidenced by the GDT Event held overnight," said Rabobank in a note.
Domestically the focus will remain on covid-19. New Zealand currently has 12 known cases after a pupil in Dunedin tested positive.