FX Update for 2021-06-29: Markets Await Fed Cues

Market Overview

• Worldwide coronavirus cases surpass 182.179 million with over 3.945 million official
deaths.
• Crude Oil rallies Monday on supply chain uncertainty in Iran.
• Fed officials say that the temporary inflation surge may last longer than first thought.
• Bank of England warns against hiking rates too soon as inflation surges.
• The coronavirus “Delta” variant has mutated again to a “Delta Plus” strain, this has been discovered in India and is worrying experts as it could be more transmissible.
• The S&P Index has climbed to a new record Friday, the biggest weekly rise since February.
• Wellington has lowered its covid alert level to 1 from midnight tonight. Read more

Economic Releases: 2021-06-28

Wednesday 30/06
2am, USD, CB Consumer Confidence
Forecast 118.9
Previous 117.2
1pm, CNY, Manufacturing PMI
Forecast 50.9
Previous 51

Thursday 01/07
12:15am, USD, ADP Non Farm Employment Change
Forecast 555K
Previous 978K
12:30am, CAD, GDP m/m
Forecast -0.80%
Previous 1.10%
2am, USD, Pending Home Sales m/m
Forecast -1.10%
Previous -4.40%
2:30am, USD, Crude Oil Inventories
Previous -7.6M
7:55pm, EUR, German Final Manufacturing PMI
Forecast 64.9
Previous 64.9
9pm, GBP, BOE Gov Bailey Speaks
All Day, All, OPEC-JMMC Meetings Read more

FX Update for 2021-06-25

Key Points:

  • Worldwide coronavirus cases surpass 180.748 million with over 3.915 million official deaths.
  • The Real Estate Institute of New Zealand’s House Price Index measuring changes in house prices has reported a 28% rise on a year-on-year basis, the highest rise in decades. 
  • New Zealand Trade Balance for May- NZD 469M prior- NZD 388M.
  • Fed’s Barkin says the rise in inflation is “clearly” due to temporary factors.
  • Nasdaq and S&P both close at record highs this morning.
  • The New Zealand Dollar is the strongest currency over the last two days of trading with the English Pound the weakest post a less than hawkish Bank of England policy decision.
Ian Dobbs

Fed Dominates Markets

Market Overview

World Central Banks, what’s been going on…

Federal Reserve
Cash Rate 0.10%
Inflation target 2.0%, currently this is 4.99% y/y  (highest read since 2008) The Fed believe recent inflation rises are “transitory”.
Interest Rate rises are not predicted to start rising until 2023- 2024 at the earliest.
Bond buying program: USD 120 billion per month- the Fed however has finally said yesterday they will start talking pulling back on asset buying, this will depend entirely on progress and not calendar dependant.
“Economic Impact Payments” have been made over the past few months totalling approximately USD 391 billion.
Federal Reserve officials indicated they expect higher interest rates by late 2023, sooner than previously projected, lifting the benchmark rate by 0.6% by the end of 2023. Read more

World Central Banks…

FX Update: 

World Central Banks, what’s been going on…

Federal Reserve

Cash Rate 0.10%

Inflation target 2.0%, currently this is 4.99% y/y (highest read since 2008) The Fed believe recent inflation rises are “transitory”

Interest Rate rises are not predicted to start rising until 2023- 2024 at the earliest. 

Bond buying program: USD 120 billion per month- the Fed however has finally said yesterday they will start talking pulling back on asset buying, this will depend entirely on progress and not calendar dependant. 

“Economic Impact Payments” have been made over the past few months totalling approximately USD 391 billion.  

Federal Reserve officials indicated they expect higher interest rates by late 2023, sooner than previously projected, lifting the benchmark rate by 0.6% by the end of 2023. Read more

FX Update for 2021-06-15: Will the Fed react to rising inflation?

Market Overview

• Worldwide coronavirus cases surpass 177.020 million with over 3.827 million official deaths
• The IOC won’t be cancelling the Olympic Games to be held in Japan late July after calls to cancel it by top ranking Japanese officials.  Japan has sunk at least 35B into staging the games which will make it the most expensive ever. The IOC’s integrity is on the line.
• The Federal Reserve still believe that inflation rises are transitory after CPI y/y rose from 4.2% to 4.99% – we should get an update from the Federal Reserve this week on future forecasts
• UK prime minister Johnson extends UK coronavirus restrictions to the 19th July 2021 after a fresh flood of the new delta variant
• The Nasdaq and S&P indices close at record highs
• Crude Oil extends higher to 3 year highs at 71.22 per barrel
• NZ House Price rise 1.5% m/m in May making this 24.7% y/y

Read more

Ian Dobbs

Economic Releases: 2021-06-14

Monday 14/06
All Day, AUD, Bank Holiday
All Day, CN, Bank Holiday

Wednesday 15/06
12:15am, GBP, BOE Gov Bailey Speaks
12:30am, USD, Core Retail Sales m/m
Forecast 0.40%
Previous -0.80%
12:30am, USD, PPI m/m
Forecast 0.50%
Previous 0.60%
12:30am, USD, Retail Sales m/m
Forecast -0.60%
Previous 0.00% Read more

FX Update for 2021-06-09: US employment Data Weakens Big Dollar

Market Overview

• Worldwide coronavirus cases surpass 174.738 million with over 3.762 million official
deaths.
• Japan’s senior medical advisor has warned Japanese officials against staging the Olympic Games on the 23rd of July based on the strain it could put on healthcare workers.
• The Federal Reserve still believe that inflation rises are transitory/temporary and that price rises will return to normal ahead.
• NZ Business Survey for June confidence came in at -0.4% on 1.8% prior but businesses generally remain economic supportive.
• US President Biden meets with UK Prime Minister Johnson tomorrow to discuss the G7 global minimum tax rate.
• The heavy traffic ANZ “Truckometer” Index for May was down -4.8% against -1.2% m/m showing the NZ economy is under reasonable pressures facing supply issues and logistics. Read more

Economic Releases: 2021-06-08

Tuesday 08/06
9PM, EUR, ZEW Economic Sentiment
Forecast 85.5
Previous 84
9PM, EUR, German ZEW Sentiment
Forecast 86
Previous 84.4

Wednesday 09/06
1PM, NZD, Prelim ANZ Business Confidence
Previous 1.8
1:30PM, CNY, CPI y/y
Forecast 1.60%
Previous 0.90%
4PM, AUD, RBA Assist Gov Kent Speaks Read more