Agreement On U.S Debt Ceiling Unlikely Before Last Minute
Agreement On U.S Debt Ceiling Unlikely Before Last Minute U.S. stocks started the week on a slightly positive note after weak economic data fueled expectations of a pause by the Federal Reserve (Fed), hopes of a resolution in the debt ceiling talks between Joe Biden and Kevin McCarthy, and Microsoft received EU approval to buy […]
Euro Having Harder Time Against Both Dollar and Sterling
Euro Having Harder Time Against Both Dollar and Sterling The University of Michigan consumer confidence for the month of May unexpectedly set the tone for last week’s trading session WS. The overall indicator fell more than expected, from 63.5 to 57.7, the lowest level since last July. However, markets focused on the prospective inflation expectations […]
AUD/USD Dips on Soft Retail Sales
AUD/USD Dips on Soft Retail Sales AUD/USD ends 6-day rally Australian retail sales decline Fed warns that banks are tightening credit The Australian dollar is in negative territory, ending a rally of close to 200 points. In the European session, AUD/USD is trading at 0.6760, down 0.29% on the day. Australian retail sales decline Australian […]
JPY Bearish Positioning is Getting Overstretched
JPY Bearish Positioning is Getting Overstretched Better than expected US non-farm payrolls for April have failed to ignite US dollar bulls. Two outliers; the safe haven currencies, CHF and JPY underperformed against the US dollar due to the resurgence of risk-on behavior in the US stock market. JPY future’s bearish positioning has highlighted a risk […]
Will Nonfarm Payrolls Hint at a Fed Pause in June?
Will Nonfarm Payrolls Hint at a Fed Pause in June? The Federal Reserve delivered its tenth consecutive rate hike on Wednesday, as expected, but reset its guidance to indicate increased emphasis on incoming data. Hence, Friday’s nonfarm payrolls will be the next test for the US dollar at 12:30 GMT, with forecasts pointing to a […]
A Risky Lopsided US Stock Market Performance
A Risky Lopsided US Stock Market Performance The year-to-date performance of the S&P 500 has been heavily skewed by the top 8 market cap stocks (FAANG + MNT). US regional bank fear persists despite the takeover of First Republic Bank by JPMorgan Chase. Markets are looking out for clues on the timing of the first […]
RBA Board Hikes the Cash Rate by 0.25%
RBA Board Hikes the Cash Rate by 0.25% Choosing to raise is the better policy option, even if it is not consistent with our interpretation of the implicit guidelines. The Reserve Bank Board raised the policy rate by another 0.25% at its May meeting, bringing the policy rate to 3.85%. The decision came as a […]
Slightly Easing Price Pressures
Slightly Easing Price Pressures A busy week of data releases and central banks begins on a quiet note. Today we are eager to see if the US ISM manufacturing index for April reflects similar strength to previous PMIs. Early Tuesday morning, we expect the RBA to leave monetary policy unchanged in line with market […]
RBA Board to Pause Again at its May Meeting
RBA Board to Pause Again at its May Meeting The Reserve Bank Board meets next week on May 2. Following the release of the March quarter inflation report Westpac now expects the Board to extend the pause it instigated at its April meeting to the May meeting. This decision comes despite the likelihood that the […]
Temporary First Republic-Related Stress to Fade Further
Temporary First Republic-Related Stress to Fade Further Shares of First Republic remain on a slide, but the spillover to other markets was much less than Tuesday. The new sell-off in the stock came after CNBC reported that the U.S. government is currently unwilling to intervene on behalf of the bank. Advisors to the bank are […]
Riksbank to Deliver 50bp Rate Hike Today
Riksbank to Deliver 50bp Rate Hike Today Today’s main event will be the Riksbank’s policy rate decision at 9:30 CET, where we expect a 50 basis point hike in line with market prices. We also expect the Riksbank to announce another rate hike in June (more on this in the Nordic section). On the data […]
Caution Prevails Ahead of Big Tech Earnings
Caution Prevails Ahead of Big Tech Earnings Most Asian equities flashed red on Tuesday, pressured by losses in Chinese shares as investors evaluated China’s re-opening story in the face of negative economic and geopolitical forces. European futures are pointing to a mixed open with market players guarded ahead of another event-heavy week for financial markets. […]
EUR/USD Key Resistance Test
EUR/USD Key Resistance Test EUR/USD: EUR/USD continues to struggle with resistance around the 1.1000 level, despite aggressive comments from ECB, which were reiterated in the release of the meeting minutes of the Bank’s latest rate hike. Headline inflation CPI has continued to fall in both the U.S. and Europe, and this week eurozone inflation CPI […]
NZ Consumers Price Index
NZ Consumers Price Index Consumer prices rose 1.2% in the March quarter and are up 6.7% over the past year. The March result was below our forecast, and much lower than the RBNZ’s expectation. New Zealand consumer prices rose 1.2% in the March quarter, with prices up 6.7% over the past 12 months. Today’s result […]
EUR/USD, GBP/USD Hold Near Resistance Ahead of Euro
EUR/USD, GBP/USD Hold Near Resistance Ahead of Euro Both the EUR/USD and GBP/USD pair are holding near key points of resistance with inflation data set to be released from each economy tomorrow morning. While European inflation has fallen as the ECB has lifted rates with tomorrow expected to show at 6.9% for headline CPI, UK […]
EUR/USD April 2022 High Offers Resistance
EUR/USD April 2022 High Offers Resistance EUR/USD cleared the February high (1.1033) last week to register a fresh yearly high (1.1076), but lack of momentum to breach the April 2022 high (1.1076) may lead to a near-term pullback in the exchange rate as it snaps the recent series of higher highs and lows. EUR/USD forecast: […]
US Inflation Expectations Jump, Earnings Season Kicks
US Inflation Expectations Jump, Earnings Season Kicks Despite the softer-than-expected inflation data released earlier last week, US inflation expectations shocked investors at last Friday’s release; the 1-year expectation jumped from 3.6% to 4.6% due to the surprise surge in energy prices. The expectation was a further easing to 3.5%. And energy bulls remain in charge […]
Constructive Developments for the Consumer
Constructive Developments for the Consumer Developments in Australia and the US this week were supportive of our views for the RBA and the FOMC. The Westpac- MI Consumer Confidence Survey provided a positive update on confidence. The RBA’s decision to leave the policy rate unchanged in April proved to be an important support, with the […]