Tag: RBNZ

  • Trade Rhetoric Sours Sentiment Again as US-China Tensions Resurface

    Trade Rhetoric Sours Sentiment Again as US-China Tensions Resurface


    Market sentiment took another bearish turn today following renewed rhetoric from US President Donald Trump, who accused China of having “totally violated” its preliminary trade agreement with the U.S. The comments, delivered via social media, were echoed by Trade Representative Jamieson Greer in a CNBC interview, where he expressed concern over China’s delayed compliance. Greer emphasized that while the US had fulfilled its commitments under the temporary trade deal, China was “slow rolling” its response—raising fears that tensions between the two economic powers may be re-escalating.

    These remarks followed comments from Treasury Secretary Scott Bessent just a day earlier, who admitted that US-China trade talks were “a bit stalled,” though he hinted at possible high-level engagement in the coming weeks. However, the combined messaging from senior officials now points to growing frustration in Washington, increasing the risk of a renewed tariff cycle. That’s something the markets are highly sensitive to, especially with ongoing legal uncertainty surrounding the court-blocked reciprocal tariffs and their pending appeal.

    On the macro front, the US April core PCE price index ticked down to 2.5% year-on-year, reaffirming that disinflation is progressing, albeit slowly. With inflation trending lower but global uncertainty mounting, Fed is widely expected to hold rates steady in the near term. Fed funds futures currently price in a 95% chance of a hold at the June FOMC meeting and a 73% chance of another hold in July. The soft inflation reading does little to shift the central bank’s cautious stance, especially as trade risks remain firmly in focus.

    In the currency markets, Dollar is heading into the final house of the trading week as the strongest performer, followed by Swiss Franc and Euro. On the weaker end, Aussie struggles at the bottom, trailed by Yen and Loonie. Kiwi and Sterling are holding in the middle. However, with sentiment remaining fragile and trade headlines still in play, positioning could shift quickly before the weekly close.

    In Europe, at the time of writing, FTSE is up 0.55%. DAX is up 0.72%. CAC is up 0.09%. UK 10-year yield is up 0.21 at 4.672. Germany 10-year yield is up 0.019 at 2.529. Earlier in Asia, Nikkei fell -1.22%. Hong Kong HSI fell -1.20%. China Shanghai SSE fell -0.47%. Singapore Strait Times fell -0.57%. Japan 10-year JGB yield fell -0.015 to 1.505.

    US core PCE inflation cools to 2.5%, income surges

    US headline PCE price index rose 0.1% mom in April, in line with expectations, while annual inflation slipped from 2.3% yoy to 2.1% yoy, below the consensus of 2.2%.

    Core PCE, Fed’s preferred inflation gauge, also rose 0.1% mom and slowed from 2.6% yoy to 2.5% yoy, matching expectations. The data supports the view that disinflation remains intact, though the pace of moderation remains modest.

    At the same time, personal income data surprised to the upside, jumping 0.8% mom or USD 210.1B, well above the expected 0.3% mom. Personal spending rose a more modest 0.2% mom, matching forecasts.

    Canada GDP expands 0.1% mom in March, another 0.1% mom in April

    Canada’s GDP grew by 0.1% mom in March, in line with market expectations. Strength in goods-producing industries continued to support overall output. The sector expanded by 0.2%, marking its second lead contribution in the past three months.

    Services-producing industries also edged higher by 0.1%. In total, 9 out of 20 sectors posted growth.

    Looking ahead, preliminary data from Statistics Canada suggests another 0.1% increase in real GDP for April.

    ECB’s Panetta signals diminished room for further rate cuts

    Italian ECB Governing Council member Fabio Panetta said today that while the central bank has made meaningful progress in easing monetary policy, bringing the deposit rate down from 4% to 2.25%, “the room for further rate cuts has naturally diminished”.

    “However, the economic outlook remains weak, and trade tensions could lead to a deterioration,” he added. “It will be essential to maintain a pragmatic and flexible approach, considering liquidity conditions and the signals coming from financial and credit markets.”

    Panetta also highlighted the high-stakes nature of ongoing trade talks between the EU and the US, warning that even tensions are likely to have a “significant impact” on the region’s economy.

    BoE’s Taylor: Global headwinds justify lower monetary policy path

    BoE MPC member Alan Taylor reinforced his dovish position in an interview with the Financial Times, highlighting growing downside risks to the UK economy from global developments.

    Taylor, who alongside Swati Dhingra voted for a larger 50bps rate cut in May, argued that monetary policy should be on a “lower policy path” given the accumulating headwinds.

    He specifically pointed to impact of Trump’s tariffs on imports would “be building up over the rest of this year in terms of trade diversion and drag on growth”.

    While UK inflation unexpectedly jumped to 3.5% in April, Taylor downplayed the significance of the rise, attributing it to “one-time tax and administered price changes.”

    Swiss KOF rises to 98.5, but growth outlook remains subdued

    Switzerland’s KOF Economic Barometer edged up to 98.5 in May from 97.1, marking a modest improvement in economic sentiment. While the uptick is a positive signal, the barometer remains below its long-term average, suggesting that the broader outlook for the Swiss economy “remains subdued”.

    According to the KOF, the manufacturing sector showed notable strength, contributing to the overall improvement. However, indicators tied to foreign demand and private consumption remain under pressure, highlighting the ongoing drag from weak external conditions and cautious domestic spending.

    Japan’s industrial production falls -0.9% mom in April, but May rebound expected

    Japan’s industrial production fell by -0.9% mom in April, a milder decline than the expected -1.4%. The Ministry of Economy, Trade and Industry maintained its view that production “fluctuates indecisively,” reflecting ongoing uncertainty, particularly around global trade developments.

    While the ministry said the impact of US tariffs was limited in April, some firms have voiced concern about the manufacturing outlook as policy risks persist.

    The breakdown of the data shows a mixed picture: six of 15 industrial sectors saw declines, including production machinery, fabricated metals, and transport equipment excluding motor vehicles. However, eight sectors recorded gains, with electronic parts and business-oriented machinery showing notable strength.

    Manufacturers surveyed expect a sharp 9.0% rebound in May, followed by a -3.4% dip in June.

    Also released, Japan’s retail sales grew by a stronger-than-expected 3.3% yoy in April, outpacing the consensus of 2.9% yoy. Meanwhile, the unemployment rate remained steady at 2.5%.

    Tokyo core inflation accelerates to 3.6%, driven by food and services costs

    Tokyo’s core CPI (excluding fresh food) accelerated to 3.6% yoy in May, up from 3.4% yoy and above market expectations of 3.5% yoy, marking the fastest pace since January 2023. This marks the third consecutive year that core inflation has exceeded the Bank of Japan’s 2% target.

    While headline CPI ticked down slightly from 3.5% yoy to 3.4% yoy, the underlying core-core measure (excluding food and energy) also edged up fro 2.0% yoy to 2.1% yoy, suggesting broad-based inflation persistence.

    The surge in non-fresh food prices, up 6.9% yoy, remains a dominant driver—highlighted by a staggering 93.2% yoy jump in rice prices.

    Another notable development is the uptick in services inflation, which climbed to 2.2% yoy from 2.0% yoy , indicating that businesses are beginning to pass on higher labor costs.

    Australia retail sales down -0.1% mom in April, weighed by weak clothing demand

    Australia’s retail sales turnover unexpectedly declined by -0.1% mom in April, missing expectations for a 0.3% mom rise. On an annual basis, sales were up 3.8% compared to April 2024/

    The Australian Bureau of Statistics noted that the decline was driven primarily by reduced spending on clothing. The weakness was partly offset by a rebound in Queensland, where businesses recovered from disruptions caused by ex-Tropical Cyclone Alfred in March.

    RBNZ’s Silk: Data to guide timing and need for further cuts

    RBNZ Assistant Governor Karen Silk said that interest rates are currently within the estimated neutral band of 2.5% to 3.5%.

    She noted that the full impact of previous easing has yet to filter through the economy, making any future adjustments highly dependent on incoming data.

    The OCR track indicates “whatever we do is going to be data-dependent, and then we will be looking to the data to help us to decide when or if we cut further from here,” she added.

    USD/CHF Mid-Day Outlook

    Daily Pivots: (S1) 0.8182; (P) 0.8265; (R1) 0.8312; More….

    Range trading continues in USD/CHF and intraday bias stays neutral. On the downside, break of 0.8187 will resume the fall from 0.8475 to retest 0.8038 low. On the upside, above 0.8346 will bring stronger rise to 0.8475. Firm break there will extend the corrective pattern from 0.8038 with another rising leg.

    In the bigger picture, long term down trend from 1.0342 (2017 high) is still in progress and met 61.8% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.8079 already. In any case, outlook will stay bearish as long as 55 W EMA (now at 0.8713) holds. Sustained break of 0.8079 will target 100% projection at 0.7382.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    22:45 NZD Building Permits M/M Apr -15.60% 9.60% 10.70%
    23:30 JPY Tokyo CPI Y/Y May 3.40% 3.50%
    23:30 JPY Tokyo CPI Core Y/Y May 3.60% 3.50% 3.40%
    23:30 JPY Tokyo CPI Core-Core Y/Y May 2.10% 2%
    23:30 JPY Unemployment Rate Apr 2.50% 2.50% 2.50%
    23:50 JPY Industrial Production M/M Apr P -0.90% -1.40% 0.20%
    23:50 JPY Retail Trade Y/Y Apr 3.30% 2.90% 3.10%
    01:30 AUD Retail Sales M/M Apr -0.10% 0.30% 0.30%
    01:30 AUD Private Sector Credit M/M Apr 0.70% 0.50% 0.50%
    01:30 AUD Building Permits M/M Apr -5.70% 3.10% -8.80% -7.10%
    05:00 JPY Housing Starts Y/Y Apr -26.60% -18.30% 39.10%
    06:00 EUR Germany Retail Sales M/M Apr -1.10% 0.30% -0.20%
    07:00 CHF KOF Economic Barometer May 98.5 98.3 97.1
    08:00 EUR Eurozone M3 Money Supply Y/Y Apr 3.90% 3.70% 3.60%
    12:00 EUR Germany CPI M/M May P 0.10% 0.10% 0.40%
    12:00 EUR Germany CPI Y/Y May P 2.10% 2.10% 2.10%
    12:30 CAD GDP M/M Mar 0.10% 0.20% -0.20%
    12:30 USD Personal Income M/M Apr 0.80% 0.30% 0.50%
    12:30 USD Personal Spending M/M Apr 0.20% 0.20% 0.70%
    12:30 USD PCE Price Index M/M Apr 0.10% 0.10% 0%
    12:30 USD PCE Price Index Y/Y Apr 2.10% 2.20% 2.30%
    12:30 USD Core PCE Price Index M/M Apr 0.10% 0.10% 0%
    12:30 USD Core PCE Price Index Y/Y Apr 2.50% 2.50% 2.60%
    12:30 USD Goods Trade Balance (USD) Apr P -87.6B -141.8B -162.0B -163.2B
    12:30 USD Wholesale Inventories Apr P 0% 0.40% 0.50%
    13:45 USD Chicago PMI May 45.1 44.6
    14:00 USD UoM Consumer Sentiment May F 50.8 50.8
    14:00 USD UoM 1-year Inflation Expectations May F 7.30% 7.30%

     



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  • Markets Turn Cautious Again on Trade Stalemates; Euro Picking Up Momentum in Some Crosses

    Markets Turn Cautious Again on Trade Stalemates; Euro Picking Up Momentum in Some Crosses


    Asian markets returned to a risk-off tone today, with investor sentiment once again weighed down by the lack of clarity on the US tariff front and the apparent stalling of key trade negotiations. The week’s earlier relief rally following the U.S. court ruling against President Trump’s sweeping reciprocal tariffs has faded, as the legal battle drags on and policy direction remains uncertain. The result is renewed market hesitancy, with equities pulling back and safe-haven flows nudging Yen higher.

    In currency markets, the tone is cautious and directionless, with almost all major pairs and crosses confined to last week’s ranges. After a volatile stretch, there’s little momentum to drive breakouts. For the day, Yen is the strongest performer, supported by risk aversion, followed by the Dollar and Kiwi. On the weaker side, the Euro is underperforming, trailed by the Aussie and Sterling. Swiss Franc and Loonie are trading near the middle of the pack.

    Thursday’s session in the US captured this shifting mood well as stocks closed well off their intraday highs. That optimism was first driven by the US Court of International Trade’s ruling that struck down most of Trump’s global tariff orders. However, the relief was short-lived. The US Court of Appeals paused that ruling to consider the administration’s appeal, setting a new timeline for responses from both plaintiffs and the government in early June. The pause has restored uncertainty to a situation markets briefly hoped was resolved.

    Further dampening sentiment were remarks from US Treasury Secretary Scott Bessent, who confirmed that US-China trade talks are “a bit stalled.” He did, however, hold out the possibility of further engagement in the coming weeks, including a potential leader-level call. Still, Bessent acknowledged that the magnitude and complexity of the negotiations likely require direct involvement from both presidents, a signal that near-term breakthroughs remain unlikely.

    Technically, however, EUR/GBP’s break of 0.8400 minor resistance suggests short term bottoming at 0.8354, on bullish convergence condition in 4H MACD. While the rebound might still be a corrective move, further rise is now in favor through 0.8458 resistance to 38.2% retracement of 0.8737 to 0.8354 at 0.8500.

    In Asia, at the time of writing, Nikkei is down -1.08%. Hong Kong HSI is down -1.54%. China Shanghai SSE is down -0.30%. Singapore Strait Times is down -0.24%. Japan 10-year JGB yield is down -0.015 at 1.506. Overnight, DOW rose 0.28%. S&P 500 rose 0.40%. NASDAQ rose 0.39%. 10year yield fell -0.053 to 4.424.

    Looking ahead, Germany CPI flash is the main focus in European sess. Switzerland will publish KOF economic barometer. Eurozone will release M3 money supply. Later in the day, attention will be on Canada GDP, and US PCE inflation.

    Japan’s industrial production falls -0.9% mom in April, but May rebound expected

    Japan’s industrial production fell by -0.9% mom in April, a milder decline than the expected -1.4%. The Ministry of Economy, Trade and Industry maintained its view that production “fluctuates indecisively,” reflecting ongoing uncertainty, particularly around global trade developments.

    While the ministry said the impact of US tariffs was limited in April, some firms have voiced concern about the manufacturing outlook as policy risks persist.

    The breakdown of the data shows a mixed picture: six of 15 industrial sectors saw declines, including production machinery, fabricated metals, and transport equipment excluding motor vehicles. However, eight sectors recorded gains, with electronic parts and business-oriented machinery showing notable strength.

    Manufacturers surveyed expect a sharp 9.0% rebound in May, followed by a -3.4% dip in June.

    Also released, Japan’s retail sales grew by a stronger-than-expected 3.3% yoy in April, outpacing the consensus of 2.9% yoy. Meanwhile, the unemployment rate remained steady at 2.5%.

    Tokyo core inflation accelerates to 3.6%, driven by food and services costs

    Tokyo’s core CPI (excluding fresh food) accelerated to 3.6% yoy in May, up from 3.4% yoy and above market expectations of 3.5% yoy, marking the fastest pace since January 2023. This marks the third consecutive year that core inflation has exceeded the Bank of Japan’s 2% target.

    While headline CPI ticked down slightly from 3.5% yoy to 3.4% yoy, the underlying core-core measure (excluding food and energy) also edged up fro 2.0% yoy to 2.1% yoy, suggesting broad-based inflation persistence.

    The surge in non-fresh food prices, up 6.9% yoy, remains a dominant driver—highlighted by a staggering 93.2% yoy jump in rice prices.

    Another notable development is the uptick in services inflation, which climbed to 2.2% yoy from 2.0% yoy , indicating that businesses are beginning to pass on higher labor costs.

    Australia retail sales down -0.1% mom in April, weighed by weak clothing demand

    Australia’s retail sales turnover unexpectedly declined by -0.1% mom in April, missing expectations for a 0.3% mom rise. On an annual basis, sales were up 3.8% compared to April 2024/

    The Australian Bureau of Statistics noted that the decline was driven primarily by reduced spending on clothing. The weakness was partly offset by a rebound in Queensland, where businesses recovered from disruptions caused by ex-Tropical Cyclone Alfred in March.

    RBNZ’s Silk: Data to guide timing and need for further cuts

    RBNZ Assistant Governor Karen Silk said that interest rates are currently within the estimated neutral band of 2.5% to 3.5%.

    She noted that the full impact of previous easing has yet to filter through the economy, making any future adjustments highly dependent on incoming data.

    The OCR track indicates “whatever we do is going to be data-dependent, and then we will be looking to the data to help us to decide when or if we cut further from here,” she added.

    Fed’s Logan: Policy well positioned, ready to respond to shifting risks

    Dallas Fed President Lorie Logan said overnight that with inflation “trending gradually back to target”, the labor market “holding strong”, and risks to Fed’s dual mandate are “roughly balanced.

    Speaking at an event, Logan emphasized that “monetary policy is in a good place”, and there is no immediate need for a policy shift.

    Logan also highlighted the potential impact of fiscal policy and regulatory changes, noting they could stimulate investment and consumer demand, while elevated economic uncertainty or financial volatility might dampen activity.

    Fed’s Daly: Modestly or moderately restrictive policy still needed

    San Francisco Fed President Mary Daly, in a Reuters interview, emphasized that above-target inflation remains her “focus” while the labor market is in “solid shape”.

    With inflation still running above the Fed’s 2% target and uncertainty around the pace of its decline, Daly said it’s appropriate for monetary policy to remain in a “modestly or moderately restrictive” stance to guide inflation back to target.

    Daly added that she’s closely watching for any signs of labor market weakening but hasn’t observed such signals yet. At the same time, she remains attentive to whether inflation continues to gradually ease or risks becoming sticky or re-accelerating.

    BoE’s Bailey stresses caution on rate cuts amid inflation surprises and trade uncertainty

    BoE Governor Andrew Bailey emphasized the need for a “gradual and careful” approach to future interest rate cuts in light of lingering global trade uncertainty and its impact on domestic inflation.

    His comments follow last week’s stronger-than-expected inflation data, which showed UK CPI jumping to 3.5% in April from 2.6%. Bailey noted it remains unclear how much of the increase is due to seasonal factors, and said the BoE will closely examine the next set of inflation data ahead of its June policy decision.

    Bailey acknowledged that while core inflation is “gradually grinding down”, the pace of improvement remains sluggish. He also highlighted a renewed rise in food price inflation, which—although not unique to the UK—has a significant influence on public inflation perceptions.

    EUR/AUD Daily Outlook

    Daily Pivots: (S1) 1.7527; (P) 1.7591; (R1) 1.7709; More…

    EUR/AUD’s break of 1.7628 resistance argues that fall from 1.8554 might have completed as a correction at 1.7245. Intraday bias is back on the upside for 38.2% retracement of 1.8554 to 1.7245 at 1.7745. Firm break there will solidify this bullish case and target 61.8% retracement at 1.8054. On the downside, however, break of 1.7460 support will bring retest of 1.7245 instead.

    In the bigger picture, as long as 1.7062 resistance turned support (2023 high) holds, up trend from 1.4281 (2022 low) should still be in progress. Break of 1.8554 will target 100% projection of 1.4281 to 1.7062 from 1.5963 at 1.8744. However, sustained break of 1.7062 will confirm medium term topping and bring deeper fall back to 1.5963 support.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    22:45 NZD Building Permits M/M Apr -15.60% 9.60% 10.70%
    23:30 JPY Tokyo CPI Y/Y May 3.40% 3.50%
    23:30 JPY Tokyo CPI Core Y/Y May 3.60% 3.50% 3.40%
    23:30 JPY Tokyo CPI Core-Core Y/Y May 2.10% 2%
    23:30 JPY Unemployment Rate Apr 2.50% 2.50% 2.50%
    23:50 JPY Industrial Production M/M Apr P -0.90% -1.40% 0.20%
    23:50 JPY Retail Trade Y/Y Apr 3.30% 2.90% 3.10%
    01:30 AUD Retail Sales M/M Apr -0.10% 0.30% 0.30%
    01:30 AUD Private Sector Credit M/M Apr 0.70% 0.50% 0.50%
    01:30 AUD Building Permits M/M Apr -5.70% 3.10% -8.80% -7.10%
    05:00 JPY Housing Starts Y/Y Apr -26.60% -18.30% 39.10%
    06:00 EUR Germany Retail Sales M/M Apr 0.30% -0.20%
    07:00 CHF KOF Economic Barometer May 98.3 97.1
    08:00 EUR Eurozone M3 Money Supply Y/Y Apr 3.70% 3.60%
    12:00 EUR Germany CPI M/M May P 0.10% 0.40%
    12:00 EUR Germany CPI Y/Y May P 2.10% 2.10%
    12:30 CAD GDP M/M Mar 0.20% -0.20%
    12:30 USD Personal Income M/M Apr 0.30% 0.50%
    12:30 USD Personal Spending M/M Apr 0.20% 0.70%
    12:30 USD PCE Price Index M/M Apr 0.10% 0%
    12:30 USD PCE Price Index Y/Y Apr 2.20% 2.30%
    12:30 USD Core PCE Price Index M/M Apr 0.10% 0%
    12:30 USD Core PCE Price Index Y/Y Apr 2.50% 2.60%
    12:30 USD Goods Trade Balance (USD) Apr P -141.8B -162.0B
    12:30 USD Wholesale Inventories Apr P 0.40% 0.50%
    13:45 USD Chicago PMI May 45.1 44.6
    14:00 USD UoM Consumer Sentiment May F 50.8 50.8
    14:00 USD UoM 1-year Inflation Expectations May F 7.30% 7.30%

     



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  • Dollar Reverses as Markets Doubt Lasting Impact of US Tariff Ruling

    Dollar Reverses as Markets Doubt Lasting Impact of US Tariff Ruling


    Dollar initially surged after the US Court of International Trade ruled against President Donald Trump’s sweeping reciprocal tariff orders. Market participants initially interpreted the ruling as a potential turning point in the US trade policy, fueling a rally in the greenback and risk assets.

    However, the greenback’s rally proved short-lived. As the US session opened, the greenback reversed course and turned broadly lower. Traders began to reassess the practical implications of the ruling, with many suspecting that the Trump administration could still find legal or procedural workarounds to reinstate the tariffs.

    In that context, the ruling may have increased legal complexity but done little to reduce the overarching geopolitical uncertainty. Traders are clearly skeptical that the legal setback will lead to a meaningful shift in trade tensions.

    Indeed, skepticism is evident across financial markets. DOW futures, which had gained more than 500 points earlier in the day, gave back almost all of those gains. NASDAQ remained resilient, supported by tech sector optimism, but broader risk appetite appeared to fade. Gold, meanwhile, rebounded above the 3300 level as safe-haven demand returned, signaling that markets are still hedging against unresolved geopolitical and policy risks.

    In currency markets, the shift in sentiment was clear. Dollar is now the weakest performer of the day, followed by Sterling and then Yen. Aussie emerged as the top gainer, while Euro and Kiwi also firmed. Swiss Franc and Canadian dollar are trading in the middle of the pack.

    Technically, intraday bias in Gold is turned neutral first with current recovery. On the upside, break of 3365.92 resistance will revive the case that correction from 3499.79 has completed with three waves down to 3120.34, and bring retest of 349.79 high. Nevertheless, below 3245.23 will extend the corrective pattern with another falling leg.

    In Europe, at the time of writing, FTSE is flat. DAX is up 0.23%. CAC is up 0.63%. UK 10-year yield is down -0.006 at 4.726. GErmany 10-year yield is down -0.005 at 2.551. Earlier in Asia, Nikkei rose 1.88%. Hong Kong HSI rose 1.35%. China Shanghai SSE rose 0.70%. Singapore Strait times rose 0.13%. Japan 10-year JGB yield rose 0.003 to 1.520.

    US initial jobless claims rise to 240k vs exp 230k

    US initial jobless claims rose 14k to 240k in the week ending May 24, above expectation of 230k. Four-week moving average of initial claims fell -250k to 231k.

    Continuing claims rose 26k to 1919k in the week ending May 17, highest since November 13, 2021. Four-week moving average of continuing claims rose 3k to 1890k, highest since November 27, 2021.

    RBNZ’s Hawkesby: OCR in neutral zone, July cut not a done deal

    RBNZ Governor Christian Hawkesby told Bloomberg TV today that another rate cut at the July meeting is “not a done deal” and “not something that’s programmed.”

    With the OCR at 3.25% after this week’s reduction, it’s now sitting within the estimated neutral range of 2.5% to 3.5%. Hawkesby emphasized the central bank has entered a phase of “considered steps,” guided closely by incoming data rather than a preset easing path.

    He acknowledged rising uncertainty, noting that near-term growth headwinds have intensified and both demand and inflation pressures are weaker than they were back in February. He also highlighted the uncertainty surrounding global trade policy, particularly tariff developments, which could play out in various ways.

    NZ ANZ business confidence falls to 36.6, supporting case for further RBNZ easing

    New Zealand’s ANZ Business Confidence index dropped sharply in May, falling from 49.3 to 36.6. Own Activity Outlook, a key indicator of firms’ expectations for their own performance, declined to 34.8 from 47.7.

    Profit expectations also plunged to 11.1, indicating mounting pressure on margins. Although cost and wage expectations eased slightly, they remain elevated, while inflation expectations edged up from 2.65% to 2.71%.

    According to ANZ, the survey paints a mixed picture: the economy is in recovery mode, but businesses continue to face tough operating conditions, particularly in passing on cost increases. The data reinforces the view that RBNZ can afford to support growth through further rate cuts, barring any major inflation or data surprises.

    ANZ expects the OCR to eventually fall to 2.5%, as global headwinds and domestic fragilities persist.

    GBP/USD Mid-Day Outlook

    Daily Pivots: (S1) 1.3440; (P) 1.3481; (R1) 1.3512; More…

    Intraday bias in GBP/USD remains neutral for the moment. With 1.3389 support intact, further rally is expected. On the upside, firm break of 1.3592 will resume larger rally for 100% projection of 1.2706 to 1.3442 from 1.3138 at 1.3874. However, decisive break of 1.3389 will confirm short term topping, and turn bias back to the downside for 1.3138 support instead.

    In the bigger picture, up trend from 1.3051 (2022 low) is in progress. Next medium term target is 61.8% projection of 1.0351 to 1.3433 from 1.2099 at 1.4004. Outlook will now stay bullish as long as 55 W EMA (now at 1.2870) holds, even in case of deep pullback.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    01:00 NZD ANZ Business Confidence May 36.6 49.3
    01:30 AUD Private Capital Expenditure Q1 -0.10% 0.50% -0.20% 0.20%
    05:00 JPY Consumer Confidence May 32.8 31.8 31.2
    12:30 CAD Current Account (CAD) Q1 -2.1B -3.6B -5.0B -3.6B
    12:30 USD Initial Jobless Claims (May 23) 240K 230K 227K 226K
    12:30 USD GDP Annualized Q1 P -0.20% -0.30% -0.30%
    12:30 USD GDP Price Index Q1 P 3.70% 3.70% 3.70%
    14:00 USD Pending Home Sales M/M Apr -1.00% 6.10%
    14:30 USD Natural Gas Storage 98B 120B
    15:00 USD Crude Oil Inventories 0.3M 1.3M

     



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  • Dollar Surges as US Court Strikes Down Trump’s Reciprocal Tariffs; Risk Appetite Rebounds

    Dollar Surges as US Court Strikes Down Trump’s Reciprocal Tariffs; Risk Appetite Rebounds


    Dollar’s rebound gather extra momentum today, after the US Court of International Trade struck down President Donald Trump’s sweeping reciprocal tariffs, giving markets a fresh catalyst. The court ruled that the reciprocal tariffs imposed in April across multiple countries under claims of correcting trade imbalances exceeded presidential authority under the International Emergency Economic Powers Act. The decision marks a significant legal blow to Trump’s aggressive trade agenda.

    In a strongly worded decision, the three-judge panel concluded that the “Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs.” The ruling also invalidated separate tariffs targeting Canada, Mexico, and China under the pretext of combating drug trafficking, stating those measures lacked a direct link to the threats cited. However, tariffs on specific items like steel and aluminum remain unaffected, as they were justified under different statutes not challenged in this case.

    The Trump administration has ten days to comply with the ruling, though it has already filed an appeal to the US. Court of Appeals for the Federal Circuit. While the immediate legal outcome remains uncertain, markets responded decisively to the court’s move.

    The decision sparked a broad risk-on reaction in financial markets, with DOW futures jumping over 500 points and Asian equities advancing, led by gains in Japan. Gold, which had been buoyed by safe-haven flows in recent sessions, fell below the 3250 level as investor sentiment improved. Nevertheless, 10-year Treasury yield remained steady around 4.5%, suggesting that bond markets are taking a more measured view, likely awaiting further clarity from the appeal process and ongoing trade negotiations.

    Dollar dominated currency markets, emerging as the clear outperformer of the day. It was followed by the Aussie and Loonie, both benefiting from the upbeat mood. At the bottom end, Yen is staying at the bottom, while Swiss Franc and Euro also softened. Kiwi and Sterling are positing in the middle.

    Technically, Gold’s break of 3279.22 support suggests that rebound from 3120.34 has already completed at 3365.92. Corrective pattern from 3499.79 should have started another falling leg. Deeper decline should be seen to 55 D EMA (now at 3190.95) first. Strong rebound from there will keep the pattern from 3499.79 a sideway one. However, sustained break of the 55 D EMA will open up deeper fall through 3120.34 to 100% projection of 3449.79 to 3120.34 from 3365.92 at 2980.47, which is slightly below 3000 psychological level.

    In Asia, at the time of writing, Nikkei is up 1.79%. Hong Kong HSI is up 1.07%. China Shanghai SSE is up 0.72%. Singapore Strait Times is down -0.30%. Japan 10-year JGB yield is up 0.003 at 1.521. Overnight, DOW fell -0.58%. S&P 500 fell -0.56%. NASDAQ fell -0.51%. 10-year yield rose 0.043 to 4.477.

    Looking ahead, the European calendar is empty with Switzerland, France and Germany on holiday. Later in the day, US will release GDP revision, jobless claims and pending home sales.

    RBNZ’s Hawkesby: OCR in neutral zone, July cut not a done deal

    RBNZ Governor Christian Hawkesby told Bloomberg TV today that another rate cut at the July meeting is “not a done deal” and “not something that’s programmed.”

    With the OCR at 3.25% after this week’s reduction, it’s now sitting within the estimated neutral range of 2.5% to 3.5%. Hawkesby emphasized the central bank has entered a phase of “considered steps,” guided closely by incoming data rather than a preset easing path.

    He acknowledged rising uncertainty, noting that near-term growth headwinds have intensified and both demand and inflation pressures are weaker than they were back in February. He also highlighted the uncertainty surrounding global trade policy, particularly tariff developments, which could play out in various ways.

    NZ ANZ business confidence falls to 36.6, supporting case for further RBNZ easing

    New Zealand’s ANZ Business Confidence index dropped sharply in May, falling from 49.3 to 36.6. Own Activity Outlook, a key indicator of firms’ expectations for their own performance, declined to 34.8 from 47.7.

    Profit expectations also plunged to 11.1, indicating mounting pressure on margins. Although cost and wage expectations eased slightly, they remain elevated, while inflation expectations edged up from 2.65% to 2.71%.

    According to ANZ, the survey paints a mixed picture: the economy is in recovery mode, but businesses continue to face tough operating conditions, particularly in passing on cost increases. The data reinforces the view that RBNZ can afford to support growth through further rate cuts, barring any major inflation or data surprises.

    ANZ expects the OCR to eventually fall to 2.5%, as global headwinds and domestic fragilities persist.

    FOMC minutes reveal deepening concerns over persistent inflation and trade-led slowdown

    The FOMC minutes from the May 6–7 meeting highlighted growing anxiety among policymakers about the dual threat of persistent inflation and deteriorating growth prospects, largely stemming from US trade policies.

    Nearly all participants flagged the risk that inflation could be “more persistent than expected” as the economy adjusts to elevated import tariffs. This situation, they warned, could force the Fed into “difficult tradeoffs” if inflation stays stubborn while growth and employment begin to falter.

    The Committee agreed that uncertainty surrounding the economic outlook had “increased further”, justifying a cautious stance on monetary policy, “until the net economic effects of the array of changes to government policies become clearer.”

    Fed staff revised their GDP projections lower for 2025 and 2026, citing a larger-than-anticipated drag from recent tariff announcements. Beyond the short-term impact, officials also warned of longer-term structural effects, with trade restrictions likely to slow productivity growth and reduce the economy’s potential “over the next few years.”

    The labor market outlook has also darkened, with staff forecasting the unemployment rate to rise above its “natural rate” by year-end and remain elevated through 2027.

    Inflation forecast was revised higher, with tariffs seen boosting prices notably in 2025, before gradually easing. Inflation is still expected to return to 2% by 2027, but the path there is now more complicated.

    EUR/USD Daily Outlook

    Daily Pivots: (S1) 1.1268; (P) 1.1307; (R1) 1.1329; More…

    EUR/USD’s break of 1.1255 support suggests that rebound 1.1064 has completed at 1.1417. Corrective pattern from 1.1572 is now extending with another falling leg. Intraday bias is back on the downside for 1.1064 first. Break there will target 100% projection of 1.1572 to 1.1064 from 1.1417 at 1.0909. For now, risk will stay on the downside as long as 1.1417 resistance holds, in case of recovery.

    In the bigger picture, rise from 0.9534 long term bottom could be correcting the multi-decade downtrend or the start of a long term up trend. In either case, further rise should be seen to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. This will remain the favored case as long as 55 W EMA (now at 1.0858) holds.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    01:00 NZD ANZ Business Confidence May 36.6 49.3
    01:30 AUD Private Capital Expenditure Q1 -0.10% 0.50% -0.20% 0.20%
    05:00 JPY Consumer Confidence May 32.8 31.8 31.2
    12:30 CAD Current Account (CAD) Q1 -3.6B -5.0B
    12:30 USD Initial Jobless Claims (May 23) 230K 227K
    12:30 USD GDP Annualized Q1 P -0.30% -0.30%
    12:30 USD GDP Price Index Q1 P 3.70% 3.70%
    14:00 USD Pending Home Sales M/M Apr -1.00% 6.10%
    14:30 USD Natural Gas Storage 98B 120B
    15:00 USD Crude Oil Inventories 0.3M 1.3M

     



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  • Dollar Recovery Slows Ahead of FOMC Minutes as Market Seeks Clarity

    Dollar Recovery Slows Ahead of FOMC Minutes as Market Seeks Clarity


    Dollar’s near-term rebound is still intact as markets head into US session. But appears to be fading as traders await fresh catalysts. While the greenback has benefited from stabilizing sentiment, there’s a lack of conviction behind the move, particularly with no data releases of note today. Markets are now turning their attention to the upcoming FOMC minutes, though expectations for a clear policy signal remain low.

    The minutes from the May 6–7 FOMC meeting are expected to show a divided Fed grappling with increased volatility and an unpredictable policy backdrop, largely stemming from trade tensions. A key point of debate within the Fed may have been how to respond if elevated tariffs return and remain in place. While some officials may view tariff-driven inflation as transitory and argue for policy support to counteract the drag on growth, others may be more concerned about a shift in inflation expectations and the risk of persistent price pressures. Despite those differences, there is likely consensus around two core ideas: that tariffs are inherently stagflationary, and that it’s too early to commit to rate adjustments amid current uncertainty.

    As a result, today’s release is unlikely to shift the market narrative in a meaningful way. Trading may remain subdued unless there’s an unexpected shift in tone or language around inflation risks or rate sensitivity. With Fed still firmly in a no-hurry, data-dependent mode, the market may continue to drift until the next major inflation print or employment report.

    Looking across the broader currency markets, Dollar remains the week’s strongest performer so far. Kiwi follows as second, receiving a boost after RBNZ delivered a 25bps rate cut with a surprising dissent. Euro also finds modest support, ranking third on the performance board. In contrast, Yen remains the weakest major, weighed down by falling super-long JGB yields. Aussie and Swiss Franc also trail, while Sterling and Loonie remain in the middle.

    Technically, Ethereum might be ready to complete the near-term triangle consolidation pattern from 2737.57. Firm break of this resistance will resume the rally from 1382.55. Next target is 61.8% projection of 1382.55 to 2737.57 from 2507.39 at 3344.79. However, break of 2507.39 support will extend the corrective pattern with another falling leg instead.

    In Europe, at the time of writing, FTSE is down -0.06%. DAX is down -0.45%. CAC is down -0.13%. UK 10-year yield is up 0.012 at 4.683. Germany 10-year yield is down -0.001 at 2.541. Earlier in Asia, Nikkei closed flat. Hong Kong HSI fell -0.53%. China Shanghai SSE fell -0.02%. Singapore Strait Times rose 0.41%. Japan 10-year JGB yield rose 0.052 to 1.518.

    ECB survey shows short-term inflation expectations climb as growth outlook worsens

    ECB’s latest Consumer Expectations Survey for April showed a modest but notable uptick in short-term inflation expectations.

    Median expectations for inflation over the next 12 months rose to 3.1%, the highest since February 2024. However, medium- and long-term inflation expectations remained steady, with the three-year outlook unchanged at 2.5% and the five-year projection holding at 2.1% for the fifth straight month.

    Alongside the rise in short-term inflation forecasts, the survey revealed an increase in uncertainty about inflation over the coming year, matching levels last seen in June 2024.

    More concerning, however, is the deepening pessimism around growth and employment. Expectations for economic growth over the next 12 months dropped sharply to -1.9% from -1.2% in March. Expected unemployment ticked up slightly from 10.4% to 10.5%.

    RBNZ cuts OCR to 3.25%, one member favors holding steady

    RBNZ lowered the Official Cash Rate by 25 basis points to 3.25%, in line with market expectations. The decision was not unanimous, passed by a 5-1 vote.

    The central bank emphasized that inflation is now within the target band and is “well placed” to respond to both domestic and international developments.

    Meeting minutes revealed that some committee members favored holding the rate steady at 3.50%, citing a desire to monitor elevated global uncertainty and potential inflation risks stemming from recent tariff increases.

    Maintaining the OCR, they argued, could have helped anchor inflation expectations more firmly around the 2% midpoint.

    In its accompanying Monetary Policy Statement, RBNZ revised down its rate path projections slightly. The OCR is now expected to fall to 3.12% by September 2025 (previously 3.23%), and to 2.87% by June 2026 (previously 3.10%).

    Australia’s monthly CPI unchanged 2.4%, core inflation edges higher

    Australia’s monthly CPI held steady at 2.4% yoy in April, slightly above expectations of 2.3% yoy, marking the third consecutive month of unchanged headline inflation.

    However, underlying inflation measures moved higher, with CPI excluding volatile items and holiday travel rising to 2.8% yoy from 2.6% yoy. Trimmed mean CPI also tickd up from 2.7% yoy to 2.8% yoy.

    These developments suggest that while headline inflation appears stable, price pressures beneath the surface remain persistent.

    Key contributors to the annual inflation rate included food and non-alcoholic beverages (+3.1%), recreation and culture (+3.6%), and housing (+2.2%).

    BoJ’s Ueda highlights focus on short- and medium-term rates

    BoJ Governor Kazuo Ueda told parliament today that shifts in short- and medium-term interest rates have a more pronounced impact on economic activity than movements in super-long yields.

    He explained that corporate and household debt is more concentrated in those shorter maturities, making the economy more sensitive to changes in that segment of the yield curve.

    However, Ueda also acknowledged the spillover effects of volatility in super-long bond yields, noting that sharp moves in that part of the curve can ripple through to shorter maturities and influence overall financial conditions.

    “We’ll carefully watch market developments and their impact on the economy, he emphasized.

    USD/CHF Mid-Day Outlook

    Daily Pivots: (S1) 0.8214; (P) 0.8247; (R1) 0.8306; More….

    Range trading continues in USD/CHF and intraday bias stays neutral. Another fall is in favor as long as 0.8305 minor resistance holds. Below 0.8187 will target a retest on 0.8038 low first. Firm break there will resume larger down trend. Nevertheless, sustained break of 0.8305 will argue that pullback from 0.8475 has completed, and turn bias back to the upside to extend the pattern from 0.8038 with another rising leg.

    In the bigger picture, long term down trend from 1.0342 (2017 high) is still in progress and met 61.8% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.8079 already. In any case, outlook will stay bearish as long as 55 W EMA (now at 0.8713) holds. Sustained break of 0.8079 will target 100% projection at 0.7382.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    01:30 AUD Monthly CPI Y/Y Apr 2.40% 2.30% 2.40%
    02:00 NZD RBNZ Interest Rate Decision 3.25% 3.25% 3.50%
    03:00 NZD RBNZ Press Conference
    06:45 EUR France Consumer Spending M/M Apr 0.30% 0.80% -1%
    06:45 EUR France GDP Q/Q Q1 F 0.10% 0.10% 0.10%
    07:55 EUR Germany Unemployment Change Apr 34K 10K 4K
    07:55 EUR Germany Unemployment Rate Apr 6.30% 6.30% 6.30%
    08:00 CHF UBS Economic Expectations May -22 -51.6
    18:00 USD FOMC Minutes

     



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  • Dollar Rides Optimism Wave; RBNZ Lifts Kiwi, Aussie Ignores CPI Surprise

    Dollar Rides Optimism Wave; RBNZ Lifts Kiwi, Aussie Ignores CPI Surprise


    Dollar’s broad-based rebound gained further momentum in Asian session today. The turnaround in risk appetite has been key in lifting the greenback, which had come under pressure amid recent tariff tensions and soft economic signals. The rebound is also visible across asset classes, US equities have reversed losses tied to US-EU trade fears, and the 10-year yield has returned to levels seen before last week’s Treasury selloff.

    This shift in tone followed US President Donald Trump’s decision to postpone the implementation of a 50% tariff on EU goods until July 9. Trump further noted overnight that the EU had reached out to set up meeting dates, describing the latest developments as “positive.”

    Elsewhere, Kiwi saw a jump following RBNZ’s 25bps rate cut to 3.25%. What surprised markets was the internal division within the committee, as one member dissented and preferred no change. The minutes revealed a genuine debate on the merits of holding rates steady to better assess trade-related uncertainties and their inflationary implications. The signal was clear: while more easing is possible, the path ahead will not be automatic.

    Aussie, by contrast, showed a muted response to stronger-than-expected monthly CPI data. Although core inflation edged higher, it remains comfortably within the RBA’s 2–3% target band. As such, the print is unlikely to alter RBA’s policy course. With quarterly inflation data due on July 30, the central bank is expected to wait until its August meeting to make a more informed decision on the next move, likely another 25bps cut.

    In terms of performance, Dollar is currently leading for the week, followed by Sterling and then Euro. Yen is the weakest major, pressured by falling long dated Japanese government bond yields. Aussie and Swiss Franc are also lagging. Kiwi and Loonie sit in the middle of the pack.

    Technically, AUD/NZD is extending the near term fall from 1.0920 today. For now, without clear downside momentum, this decline is still seen as a corrective move. Break of 1.0848 resistance will argue that rebound from 1.0649 is ready to resume through 1.0920 resistance. However, clear break of the lower channel support will argue that the cross is accelerating downward. That would raise the chance that it’s actually resume the larger down trend through 1.0649 low.

    In Asia, at the time of writing, Nikkei is up 0.52%. Hong Kong HSI is down -0.43%. China Shanghai SSE is up 0.03%. Singapore Strait Times is up 0.44%. Japan 10-year JGB yield is up 0.033 at 1.499. Overnight, DOW rose 1.78%. S&P 500 rose 2.05%. NASDAQ rose 2.47%. 10-year yield fell -0.75 to 4.434.

    RBNZ cuts OCR to 3.25%, one member favors holding steady

    RBNZ lowered the Official Cash Rate by 25 basis points to 3.25%, in line with market expectations. The decision was not unanimous, passed by a 5-1 vote.

    The central bank emphasized that inflation is now within the target band and is “well placed” to respond to both domestic and international developments.

    Meeting minutes revealed that some committee members favored holding the rate steady at 3.50%, citing a desire to monitor elevated global uncertainty and potential inflation risks stemming from recent tariff increases.

    Maintaining the OCR, they argued, could have helped anchor inflation expectations more firmly around the 2% midpoint.

    In its accompanying Monetary Policy Statement, RBNZ revised down its rate path projections slightly. The OCR is now expected to fall to 3.12% by September 2025 (previously 3.23%), and to 2.87% by June 2026 (previously 3.10%).

    Australia’s monthly CPI unchanged 2.4%, core inflation edges higher

    Australia’s monthly CPI held steady at 2.4% yoy in April, slightly above expectations of 2.3% yoy, marking the third consecutive month of unchanged headline inflation.

    However, underlying inflation measures moved higher, with CPI excluding volatile items and holiday travel rising to 2.8% yoy from 2.6% yoy. Trimmed mean CPI also tickd up from 2.7% yoy to 2.8% yoy.

    These developments suggest that while headline inflation appears stable, price pressures beneath the surface remain persistent.

    Key contributors to the annual inflation rate included food and non-alcoholic beverages (+3.1%), recreation and culture (+3.6%), and housing (+2.2%).

    BoJ’s Ueda highlights focus on short- and medium-term rates

    BoJ Governor Kazuo Ueda told parliament today that shifts in short- and medium-term interest rates have a more pronounced impact on economic activity than movements in super-long yields.

    He explained that corporate and household debt is more concentrated in those shorter maturities, making the economy more sensitive to changes in that segment of the yield curve.

    However, Ueda also acknowledged the spillover effects of volatility in super-long bond yields, noting that sharp moves in that part of the curve can ripple through to shorter maturities and influence overall financial conditions.

    “We’ll carefully watch market developments and their impact on the economy, he emphasized.

    Fed’s Williams stresses need for vigilance on inflation expectations

    New York Fed President John Williams emphasized the importance of acting decisively to prevent inflation from becoming entrenched, warning that delayed responses risk making price pressures permanent.

    Speaking at a conference in Tokyo, Williams noted, “you want to avoid inflation becoming highly persistent because that could become permanent”.

    “And the way to do that is to respond relatively strongly” when inflation begins to deviate from target.

    He also highlighted the sensitivity of inflation expectations, cautioning that any significant shift could be “detrimental” to economic stability.

    USD/JPY Daily Outlook

    Daily Pivots: (S1) 142.83; (P) 143.64; (R1) 145.17; More…

    USD/JPY’s break of 144.31 resistance suggests that fall from 148.64 might have completed as a correction at 142.10. Intraday bias is back on the upside for 55 D EMA (now at 145.83). Sustained break there will affirm this case and target 148.64 resistance and above. Nevertheless, break of 142.10 will turn bias back to the downside for 139.87 low instead.

    In the bigger picture, price actions from 161.94 are seen as a corrective pattern to rise from 102.58 (2021 low), with fall from 158.86 as the third leg. Strong support should be seen from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound. However, sustained break of 139.26 would open up deeper medium term decline to 61.8% retracement at 125.25.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    01:30 AUD Monthly CPI Y/Y Apr 2.40% 2.30% 2.40%
    02:00 NZD RBNZ Interest Rate Decision 3.25% 3.25% 3.50%
    03:00 NZD RBNZ Press Conference
    06:45 EUR France Consumer Spending M/M Apr 0.80% -1%
    06:45 EUR France GDP Q/Q Q1 F 0.10% 0.10%
    07:55 EUR Germany Unemployment Change Apr 10K 4K
    07:55 EUR Germany Unemployment Rate Apr 6.30% 6.30%
    08:00 CHF UBS Economic Expectations May -51.6
    18:00 USD FOMC Minutes

     



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  • Dollar Drops as Tariff Confusion Reignites and Trade Talks Drag On

    Dollar Drops as Tariff Confusion Reignites and Trade Talks Drag On


    Dollar extended its slide as the new week opened in Asia, with investors once again thrown off balance by US President Donald Trump’s unpredictable tariff messaging. The latest development sees Trump agreeing to delay the planned 50% tariff hike on the European Union to July 9, following a direct request from European Commission President Ursula von der Leyen. While that initially offered a sense of relief, markets remain unsettled by Trump’s abrupt shifts in tone, having only days ago vowed there would be “no deal” before June and called for an immediate 50% levy.

    Von der Leyen’s message on social media highlighted the EU’s readiness to move the discussions forward “swiftly and decisively”, But with Trump’s prior threats still fresh in investors’ minds, confidence in any stable outcome remains low. The tariff truce extension does little to erase concerns over the longer-term outlook for transatlantic trade, especially with the US’s broader reciprocal tariff regime still in place at a baseline of 10%.

    At the same time, Japan is pushing ahead with its own talks with Washington. Prime Minister Shigeru Ishiba indicated on Sunday that Tokyo aims to reach a deal by the G7 summit next month. There appears to be some traction in the bilateral dialogue, including discussions on non-tariff measures and shipbuilding cooperation. Notably, the US has expressed interest in using Japanese shipyards to repair warships, while Japan has floated the potential for collaboration on Arctic icebreakers, an area where it claims a technological edge.

    However, Japan’s chief negotiator Ryosei Akazawa struck a cautious tone upon returning from his third round of discussions in Washington. He reiterated that any agreement would be contingent on all elements falling into place as a package, and that “nothing is agreed until everything is agreed.” The scheduling of the next round, including a meeting with US Treasury Secretary Scott Bessent, is still being finalized.

    With US and UK markets closed for holiday and an empty data calendar to start the week, focus is squarely on trade developments and sentiment-driven flows. Later in the week, attention will turn to RBNZ, which is widely expected to cut interest rates by 25bps. FOMC minutes, US durable goods, consumer confidence, and PCE inflation data will offer critical insight too. In addition, key releases from Australia (monthly CPI and retail sales), Canada (Q1 GDP), and Japan (Tokyo CPI) will round out the week. But given the pace of political developments on trade, economic figures may take a back seat unless they show sharp surprises.

    In the currency markets, Dollar is at the bottom of the board, followed by Yen and Swiss Franc. Kiwi is leading gains, followed by Aussie and Euro. Sterling and Loonie are more mixed, hovering around the middle.

    Technically, with today’s rally, immediate focus is now on 0.6028 resistance in NZD/USD. Decisive break there will resume the rise from 0.5484 and target 61.8% projection of 0.5484 to 0.6028 from 0.5845 at 0.6181. Nevertheless, the real test for NZD/USD’s medium term outlook is on 38.2% retracement of 0.7463 (2021 high) to 0.5484 at 0.6240.

    In Asia, at the time of writing, Nikkei is up 0.83%. Hong Kong HSI is down -0.98%. China Shanghai SSE is down -0.18%. Singapore Strait Times is down -0.43%. Japan 10-year JGB yield is down -0.007 at 1.542.

    Fed Kashkari: Uncertainty to delay policy at least until September

    Minneapolis Fed President Neel Kashkari warned today that major shifts in US trade policies are clouding the outlook for monetary policy, making it difficult for the Fed to move on interest rates before September.

    While “anything is possible,” Kashkari said in an interview with Bloomberg TV, he’s unsure whether the picture will be “clear enough” by then. Much hinges, he added, on whether trade negotiations between the US and its partners yield concrete deals in the coming months, which could “provide a lot of the clarity we are looking for.”

    The uncertainty, Kashkari explained, is weighing on economic activity. He emphasized the stagflationary nature of the tariff shock, noting that its impact will depend on both the scale and duration of the levies.

    On financial markets, Kashkari acknowledged that rising US Treasury yields might reflect a broader reassessment by global investors about the risks of holding American assets. He suggested that the current bond market reaction could signal a new global paradigm.

    RBNZ set to ease again, FOMC minutes and PCE inflation watched

    RBNZ is widely expected to lower the Official Cash Rate by 25bps to 3.25% this week, continuing its cautious policy easing cycle. Q1 CPI in New Zealand surprised to the upside and may warrant a slight upward revision in near-term inflation forecasts. Nevertheless, the outlook for growth has become increasingly clouded by external trade risks. As such, the RBNZ would probably adopt a data-dependent easing bias beyond this meeting, weighing the need for further cuts against incoming global and domestic developments.

    Markets will be particularly attentive to any forward guidance on July from RBNZ. A hawkish tilt, such as hinting at an openness to pause depending on how trade and inflation evolve—could dampen expectations for a follow-up cut. Nonetheless, the baseline remains tilted toward continued easing unless global risks recede or domestic data markedly improve.

    In the US, the release of the FOMC minutes from the May meeting will draw scrutiny, though Fed is unlikely to deviate from its current stance. Policymakers have made clear they are in no rush to resume easing, preferring to wait for clearer signs from inflation and trade.

    With the 90-day trade truce now at the halfway mark and tensions reemerging—especially with Trump’s threats toward the EU, uncertainty still dominates the outlook. More clarity may arrive with Fed’s next meeting on June 17–18, when updated economic projections will be published.

    Investors will also focus on key US data including durable goods orders, consumer confidence, and the core PCE price index.

    Elsewhere, Australia’s monthly CPI and retail sales will shed light on the pace of disinflation and consumption ahead of the RBA’s July decision. Canada’s GDP, Japan’s Tokyo CPI, retail sales, and industrial output will also be important inputs for their respective central banks.

    Here are some highlights for the week:

    • Tuesday: Japan corporate service price; Swiss trade balance; Germany Gfk consumer sentiment; US durable goods orders, consumer confidence.
    • Wednesday: Australia CPI; RBNZ rate decision; Germany import prices, unemployment; France consumer spending; Swiss UBS economic expectations; FOMC minutes.
    • Thursday: New Zealand ANZ business confidence; US GDP revision, pending home sales.
    • Friday: New Zealand building permits; Japan Tokyo CPI, industrial production, retail sales; Australia retail sales; Germany retail sales, CPI flash; Swiss KOF economic barometer; Eurozone M3 money supply; Canada GDP; US trade balance, personal income and spending, PCE inflation, Chicago PMI.

    GBP/USD Daily Outlook

    Daily Pivots: (S1) 1.3451; (P) 1.3496; (R1) 1.3587; More…

    Intraday bias in GBP/USD stays on the upside at this point. Firm break of 61.8% projection of 1.2706 to 1.3442 from 1.3138 at 1.3593 will target 100% projection at 1.3874. On the downside, below 1.3468 minor support will turn intraday bias neutral first. But retreat should be contained well above 1.3138 support to bring another rally.

    In the bigger picture, up trend from 1.3051 (2022 low) is in progress. Next medium term target is 61.8% projection of 1.0351 to 1.3433 from 1.2099 at 1.4004. Outlook will now stay bullish as long as 55 W EMA (now at 1.2870) holds, even in case of deep pullback.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    05:00 JPY Leading Economic Index Mar F 108.1 107.7 107.7
    06:30 CHF Employment Level Q1 5.534M

     



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  • Markets Stuck in Ranges as Data Fail to Inspire

    Markets Stuck in Ranges as Data Fail to Inspire


    Market activity remains subdued ahead of the weekend, with major currency pairs and crosses locked within yesterday’s tight ranges. Earlier in the day, New Zealand Dollar received a brief lift from rise in inflation expectations, but the move lacked conviction and quickly faded. Similarly, Japan’s weaker-than-expected Q1 GDP figures failed to trigger much reaction, as traders largely shrugged off domestic data and remained directionless.

    Broader risk sentiment is offering little help, with global equity markets also confined to narrow ranges. Investors are awaiting fresh cues, with some attention turning to the upcoming US University of Michigan Consumer Sentiment survey. While a bounce in sentiment is possible following the 90-day reciprocal tariff truce, lingering policy uncertainty may cap any gains. Of particular interest will be the inflation expectations component, as a notable uptick could reinforce concerns that tariffs are beginning to feed into price pressures.

    For the week, Aussie is leading the pack, followed by Dollar and Sterling. On the weaker side, Swiss Franc is underperforming, trailed by Euro and Kiwi. Yen and Canadian Dollar are trading more neutrally.

    In Europe, at the time of writing, FTSE is up 0.40%. DAX is up 0.45%. CAC is up 0.37%. UK 10-year yield is down -0.038 at 4.623. Germany 10-year yield is down -0.047 at 2.575. Earlier in Asia, Nikkei closed flat. Hong Kong HSI fell -0.46%. China Shanghai SSE fell -0.40%. Singapore Strait Times rose 0.15%. Japan 10-year JGB yield fell -0.024 at 1.455.

    Fed’s Bostic sees only one rate cut in 2025, as uncertainty unlikely to resolve quickly

    Atlanta Fed President Raphael Bostic reiterated his expectation for just one interest rate cut this year, citing persistent uncertainty surrounding global trade policy “is unlikely to resolve itself quickly.”

    Speaking on Bloomberg’s Odd Lots podcast, Bostic pointed to the 90-day delay of reciprocal tariffs and the tentative nature of the recent US-China de-escalation, warning that the final outcomes of trade negotiations remain unclear.

    Bostic emphasized that tariffs are expected to exert upward pressure on inflation, a view supported by the Atlanta Fed’s own analysis and echoed by many economists.

    As a result, monetary policy may need to lean against those inflationary forces, limiting how far the Fed can ease. “Our policy is going to have to anticipate — and to some extent — potentially push against those inflationary forces,” he said.

    EU exports jump 15.% yoy in March on strong US shipments

    Eurozone trade data showed a strong performance in March, with exports rising 13.7% yoy to EUR 279.8B and imports up 8.8% yoy to EUR 243.0B, resulting in a solid trade surplus of EUR 36.8B. Intra-eurozone trade also rose 1.7% yoy to EUR 226.0B, indicating modest growth in internal demand.

    For the broader European Union, the trade picture was similarly positive. Exports jumped 15.2% yoy to EUR 254.8B, while imports increased by 10.4% yoy to EUR 219.5B, yielding a EUR 35.3B surplus.

    The standout development came from transatlantic trade: EU exports to the United States surged 59.5% yoy to EUR 71.4B, far outpacing the 15.8% yoy rise in imports from the U.S.

    Meanwhile, trade with the UK also showed moderate growth, with exports rising 4.8% yoy and imports increasing 5.4% yoy. In contrast, trade with China as a weak spot. EU exports to China fell sharply by -10.1% yoy to EUR 17.9B, while imports surged 15.8% yoy to EUR 48.6B.

    ECB’s Kazaks: Interest rates near terminal level of easing cycle

    Latvian ECB Governing Council member Martins Kazaks indicated market pricing of a 25bps cut at the June 5 meeting is “relatively appropriate”.

    Nevertheless, speaking to CNBC, Kazaks added that inflation developments are “by and large within the baseline scenario”. Thus, ECB is “relatively close to the terminal rate” of its easing cycle.

    Kazaks’ comments argue that ECB may enter a phase of pause after the June rate cut.

    Meanwhile, French Governing Council member Francois Villeroy de Galhau, in an interview with a regional French newspapers, acknowledged the risk of a trade war but dismissed the notion that central banks are currently engaged in a currency war.

    Villeroy defined a currency war as using interest rates competitively to gain economic advantage. Instead, he said recent currency movements are more reflective of “revisions to economic forecasts.”

    BoJ’s Nakamura urges caution on rate hikes as economy faces mounting downward pressure

    BoJ board member Toyoaki Nakamura, known for his dovish stance, warned that Japan’s economy is under “mounting downward pressure” and cautioned against “rushing” to interest rate hikes.

    Speaking today, Nakamura highlighted the risks of tightening policy while growth slows, noting that higher rates could “curb consumption and investment with a lag”.

    Nakamura also pointed to growing uncertainty stemming from US tariff policy, which he said is already causing Japanese firms to delay or scale back capital spending plans.

    He warned that escalating trade tensions could spark a “vicious cycle of lower demand and prices,” undermining both growth and inflation.

    Japan’s GDP contracts -0.2% qoq in Q1, export drag offsets capex gains

    Japan’s economy shrank by -0.2% qoq in Q1, marking its first contraction in a year and falling short of the -0.1% qoq consensus. On an annualized basis, GDP contracted by -0.7%, a sharp disappointment compared to expectations for -0.2%.

    The weakness was largely driven by external demand, which subtracted -0.8 percentage points from growth as exports declined -0.6% qoq while imports jumped 2.9% qoq.

    Domestically, the picture was mixed. Private consumption, comprising more than half of Japan’s output, was flat on the quarter. However, capital expenditure provided some support, rising by a solid 1.4% qoq.

    Meanwhile, inflation pressures showed no sign of easing, with the GDP deflator accelerating from 2.9% yoy to 3.3% yoy, above expectations of 3.2% yoy.

    RBNZ inflation expectations rise to 2.41%, further easing seen ahead

    RBNZ’s latest Survey of Expectations for May revealed a notable uptick in inflation forecasts across all time horizons.

    One-year-ahead inflation expectations climbed from 2.15% to 2.41%, while two-year expectations rose from 2.06% to 2.29%. Even long-term projections edged higher, with five- and ten-year-ahead expectations increasing to 2.18% and 2.15% respectively.

    Despite the upward revisions in inflation outlook, expectations for monetary policy point clearly toward easing.

    With the Official Cash Rate currently at 3.50%, most respondents anticipate a 25 bps cut by the end of Q2. Looking further ahead, the one-year-ahead OCR expectation also declined from 3.23% to 2.91%.

    NZ BNZ manufacturing rises to 53.9, recovery gains ground

    New Zealand’s BusinessNZ Performance of Manufacturing Index edged up from 53.2 to 53.9 in April. The gain was driven by improvements in employment and new orders, up to 55.0 and 51.4 respectively, with employment reaching its highest level since July 2021. However, production eased slightly to 53.8.

    BNZ Senior Economist Doug Steel noted that while the sector isn’t booming, the recovery is clear, with the PMI rebounding sharply from a low of 41.4 last June.

    Still, he cautioned, “there remain questions around how sustainable it is given uncertainty stemming from offshore”.

    GBP/USD Mid-Day Outlook

    Daily Pivots: (S1) 1.3263; (P) 1.3292; (R1) 1.3331; More…

    Intraday bias in GBP/USD remains neutral as range trading continues. On the upside, decisive break of 1.3433/42 key resistance zone will confirm larger up trend resumption. Nevertheless, below 1.3138 will resume the correction from 1.3442. But downside should be contained by 38.2% retracement of 1.2099 to 1.3442 at 1.2929 to bring rebound.

    In the bigger picture, price actions from 1.3433 are seen as a corrective pattern to the up trend from 1.3051 (2022 low). Rise from 1.2099 could either be resuming the up trend, or the second leg of a consolidation pattern. Overall, GBP/USD should target 1.4248 key resistance (2021 high) on decisive break of 1.3433 at a later stage.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    22:30 NZD Business NZ PMI Apr 53.9 53.2
    23:50 JPY GDP Q/Q Q1 P -0.20% -0.10% 0.70%
    23:50 JPY GDP Deflator Y/Y Q1 P 3.30% 3.20% 2.90%
    03:00 NZD RBNZ Inflation Expectations Q2 2.29% 2.06%
    04:30 JPY Industrial Production M/M Mar F 0.20% -1.10% -1.10%
    09:00 EUR Eurozone Trade Balance (EUR) Mar 27.9B 17.5B 21.0B 22.7B
    12:30 USD Housing Starts Apr 1.36M 1.37M 1.32M 1.34M
    12:30 USD Building Permits Apr 1.41M 1.45M 1.48M
    12:30 USD Import Price Index M/M Apr 0.10% -0.40% -0.10% -0.40%
    14:00 USD UoM Consumer Sentiment May P 53 52.2
    14:00 USD UoM Inflation Expectations May P 6.50%

     



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  • Weak Data Overlooked as Yen Rises on Risk-Off Mood

    Weak Data Overlooked as Yen Rises on Risk-Off Mood


    Mild risk-off mood is helping Yen to extend its near-term rebound, despite fresh signs of economic weakness at home. Japan’s economy was already showing signs of strain even before the impact of US tariffs, with Q1 GDP contracting more sharply than expected. BoJ is left in an increasingly precarious position, wedged between deteriorating growth and persistent inflationary pressures.

    A recent Reuters poll taken between May 7 and 13 revealed a significant shift in market expectations, with 67% of economists now projecting that BoJ will hold its policy rate at 0.50% through the third quarter. That’s up sharply from just 36% a month ago, highlighting how tariff-related risks have changed expectations for near-term tightening.

    On the trade front, Japan is preparing a third round of negotiations with the US, as it seeks to secure exemptions from tariffs on automobiles and auto parts. In return, Tokyo is reportedly considering a set of concessions, including increased imports of US corn and soybeans, regulatory changes to auto inspection standards, and cooperation in shipbuilding technology.

    Chief negotiator Ryosei Akazawa is expected to travel to Washington as early as next week, though the timeline hinges on progress in working-level talks. Meanwhile, Finance Minister Katsunobu Kato will travel to Canada for G7 meetings, where he may hold bilateral discussions with US Treasury Secretary Scott Bessent on foreign exchange matters.

    Overall for the week so far, Yen is currently the top performer, followed by Sterling and then Dollar. Kiwi is the weakest, trailed by Euro and Swiss Franc. Loonie and Aussie sit in the middle of the pack. The overall tone in the currency markets remains mixed.

    Technically, Gold has bounced from key cluster support around 3150, including 55 D EMA (now at 3151.09) and 38.2% retracement of 2584.24 to 3499.79 at 3150.04. It’s possible that correction from 3499.79 has completed already. Firm of 3265.74 will reinforce this bullish case, and suggest that larger up trend is ready to resume. If realized, that should be accompanied by another round of selloff in Dollar. However, sustained break of 3150 will dampen this view and bring deeper fall to 61.8% retracement at 2933.98.

    In Asia, at the time of writing, Nikkei is down -0.06%. Hong Kong HSI is down -0.40%. China Shanghai SSE is down -0.34%. Singapore Strait Times is down -0.20%. Japan 10-year JGB yield is down -0.016 at 1.463. Overnight, DOW rose 0.65%. S&P 500 rose 0.41%. NASDAQ fell -0.18%. 10-year yield fell -0.073 to 4.455.

    Looking ahead, Eurozone trade balance in the main feature in European session. Later in the day, US will release housing starts and building permits, and import prices. But attention will be on U of Michigan consumer sentiment and inflation expectations.

    Japan’s GDP contracts -0.2% qoq in Q1, export drag offsets capex gains

    Japan’s economy shrank by -0.2% qoq in Q1, marking its first contraction in a year and falling short of the -0.1% qoq consensus. On an annualized basis, GDP contracted by -0.7%, a sharp disappointment compared to expectations for -0.2%.

    The weakness was largely driven by external demand, which subtracted -0.8 percentage points from growth as exports declined -0.6% qoq while imports jumped 2.9% qoq.

    Domestically, the picture was mixed. Private consumption, comprising more than half of Japan’s output, was flat on the quarter. However, capital expenditure provided some support, rising by a solid 1.4% qoq.

    Meanwhile, inflation pressures showed no sign of easing, with the GDP deflator accelerating from 2.9% yoy to 3.3% yoy, above expectations of 3.2% yoy.

    RBNZ inflation expectations rise to 2.41%, further easing seen ahead

    RBNZ’s latest Survey of Expectations for May revealed a notable uptick in inflation forecasts across all time horizons.

    One-year-ahead inflation expectations climbed from 2.15% to 2.41%, while two-year expectations rose from 2.06% to 2.29%. Even long-term projections edged higher, with five- and ten-year-ahead expectations increasing to 2.18% and 2.15% respectively.

    Despite the upward revisions in inflation outlook, expectations for monetary policy point clearly toward easing.

    With the Official Cash Rate currently at 3.50%, most respondents anticipate a 25 bps cut by the end of Q2. Looking further ahead, the one-year-ahead OCR expectation also declined from 3.23% to 2.91%.

    NZ BNZ manufacturing rises to 53.9, recovery gains ground

    New Zealand’s BusinessNZ Performance of Manufacturing Index edged up from 53.2 to 53.9 in April. The gain was driven by improvements in employment and new orders, up to 55.0 and 51.4 respectively, with employment reaching its highest level since July 2021. However, production eased slightly to 53.8.

    BNZ Senior Economist Doug Steel noted that while the sector isn’t booming, the recovery is clear, with the PMI rebounding sharply from a low of 41.4 last June.

    Still, he cautioned, “there remain questions around how sustainable it is given uncertainty stemming from offshore”.

    Fed’s Barr: Solid economy faces threats from tariff-driven supply disruptions

    Fed Governor Michael Barr highlighted solid growth, low unemployment, and continued progress on disinflation in the US economy. However, he flagged growing concern over rising trade-related uncertainty, which has begun to weigh on consumer and business sentiment.

    In a speech overnight, Barr specifically pointed to the vulnerability of small businesses, which are more exposed to “disruptions to supply chains and distribution networks”.

    These firms are integral to broader production networks, and failures in this segment could trigger cascading effects across the economy.

    Drawing a parallel to the pandemic, Barr noted that “disruptions can have large and lasting effects on prices, as well as output,” leading to lower growth and higher inflation ahead.

    USD/JPY Daily Outlook

    Daily Pivots: (S1) 145.13; (P) 145.97; (R1) 146.53; More…

    Intraday bias in USD/JPY remains neutral and more consolidations could be seen below 148.64. . Further rally is expected as long as 144.02 resistance turned support holds. As noted before, fall from 158.86 could have completed 139.87 already. Above 148.64 will target 61.8% retracement of 158.86 to 139.87 at 151.60 next. However, firm break of 144.02 will bring retest of 139.87 low instead.

    In the bigger picture, price actions from 161.94 are seen as a corrective pattern to rise from 102.58 (2021 low), with fall from 158.86 as the third leg. Strong support should be seen from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound. However, sustained break of 139.26 would open up deeper medium term decline to 61.8% retracement at 125.25.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    22:30 NZD Business NZ PMI Apr 53.9 53.2
    23:50 JPY GDP Q/Q Q1 P -0.20% -0.10% 0.70%
    23:50 JPY GDP Deflator Y/Y Q1 P 3.30% 3.20% 2.90%
    03:00 NZD RBNZ Inflation Expectations Q2 2.29% 2.06%
    04:30 JPY Industrial Production M/M Mar F 0.20% -1.10% -1.10%
    09:00 EUR Eurozone Trade Balance (EUR) Mar 17.5B 21.0B
    12:30 USD Housing Starts Apr 1.37M 1.32M
    12:30 USD Building Permits Apr 1.45M 1.48M
    12:30 USD Import Price Index M/M Apr -0.40% -0.10%
    14:00 USD UoM Consumer Sentiment May P 53 52.2
    14:00 USD UoM Inflation Expectations May P 6.50%

     



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  • Pound and Dollar Lead FX on UK-US Trade Deal, BoE Cut Overshadowed

    Pound and Dollar Lead FX on UK-US Trade Deal, BoE Cut Overshadowed


    Sterling and the US Dollar are leading gains among major currencies today, lifted by anticipation surrounding the imminent announcement of a comprehensive US-UK trade agreement. The Pound remained resilient after BoE’s expected 25bps rate cut. The three-way split within the BoE’s Monetary Policy Committee and the mixed implications of its economic projections have made it difficult for markets to form a decisive reaction.

    BoE’s updated economic projections included two alternative scenarios, one based on weaker global demand due to trade disruptions, the other on renewed inflation stickiness from second-round effects. But with global trade dynamics in flux, these projections are highly conditional and arguably academic at this stage. A trade deal with the US may relieve some economic pressure on Britain, but its benefit depends on how the US proceeds with other partners, especially the EU and China.

    For now, attention is squarely on the 1400 GMT press conference where US President Donald Trump is expected to formally unveil the UK trade deal. Trump described the agreement as “full and comprehensive,” calling it a first step in a broader realignment of US trade policy. UK Prime Minister Keir Starmer’s office confirmed talks have progressed swiftly and promised an update later today.

    Meanwhile, Euro is also holding firm despite signs of growing transatlantic strain. European Commission has announced preparations for countermeasures in response to Washington’s reciprocal tariff regime, launching a WTO dispute and consulting on duties affecting EUR 95B worth of US imports. Still, EC President Ursula von der Leyen emphasized a preference for negotiation, suggesting room remains for diplomacy.

    In contrast, Yen is the weakest major currency today, Loonie and Swiss Franc. Aussie and Kiwi are positioning in the middle.

    Technically, Bitcoin’s rally from 74373 resumed today by breaking through 97944 resistance. Further rally is expected as long as 93351 support holds, to retest 109571 record high. Nevertheless, barring clear sign of upside acceleration, current rise is seen as the second leg a medium term corrective pattern. Hence, strong resistance is expected from 109571 to limit upside to bring near term reversal.

    In Europe, at the time of writing, FTSE is up 0.17%. DAX is up 0.80%. CAC is up 0.92%. UK 10-year yield is up 0.025 at 4.489. Germany 10-year yield is up 0.018 at 2.494. Earlier in Asia, Nikkei rose 0.41%. Hong Kong HSI rose 0.37%. China Shanghai SSE rose 0.28%. Singapore Strait Times fell -0.44%. Japan 10-year JGB yield rose 0.025 to 1.325.

    US initial jobless claims fall to 228k vs exp 235k

    US initial jobless claims fell -13k to 228k in the week ending May 3, below expectation of 235k. Four-week moving average of initial claims rose 1k to 227k.

    Continuing claims fell -29k to 1879k in the week ending April 26. Four-week moving average of continuing claims rose 9k to 1875k.

    BoE cuts 25bps, three-way vote split reveals growing rift on rate path

    BoE lowered its benchmark Bank Rate by 25 basis points to 4.25% , in line with market expectations. However, the decision revealed a rare three-way split among policymakers.

    Five members supported the 25bps reduction, while Catherine Mann and Chief Economist Huw Pill voted to keep rates unchanged. On the dovish end, Swati Dhingra and Alan Taylor backed a deeper 50bps cut.

    In its accompanying statement, BoE reiterated that a “gradual and careful approach” remains appropriate as it withdraws monetary restraint.

    While acknowledging progress on inflation, the central bank emphasized the need for policy to stay “restrictive for sufficiently long” to ensure inflation returns sustainably to the 2% target.

    In its latest Monetary Policy Report, the BoE’s baseline forecast sees CPI inflation rising to 3.5% in Q3 2025 before easing back to 2% in the medium term.

    But policymakers outlined two risk-laden alternative scenarios. The first, a lower demand scenario, assumes heightened uncertainty depresses domestic spending and inflationary pressures fade more quickly. Under this path, the economy faces a wider output gap and inflation runs -0.3% lower than baseline by the three-year horizon.

    Conversely, the second scenario envisions higher inflation persistence, where near-term rise in headline inflation triggers second-round effects in wages and prices, compounded by weak productivity growth. In this case, the impact on growth is modest, but inflation runs 0.4% above baseline throughout the forecast period.

    RBNZ flags global growth risks as tariffs echo COVID-era disruptions

    RBNZ Governor Christian Hawkesby warned today that rising global tariffs are having a clear and negative impact on global economic activity, prompting the central bank to revise down its projections for global growth.

    Speaking to a parliamentary committee, Hawkesby called the effects of the tariff wave “unambiguously” harmful. He added that while New Zealand’s exposure to a 10% US tariff on exports poses challenges, the softer New Zealand Dollar may help cushion some of the blow. Nonetheless, weaker demand from key trading partners is now a growing concern for the country’s outlook.

    Hawkesby drew a stark comparison between the supply-side disruptions caused by current tariffs and those seen during the COVID-19 pandemic, stressing that both are capable of delivering long-lasting economic distortions.

    “We know from our experience, from the COVID experience, that supply side impacts are significant, and that are long-lasting and can create real challenges,” he said.

    He added that the situation remains fluid, with considerable uncertainty about how the structural dynamics of the global economy will adjust to this new trade regime.

    BoJ minutes: Caught between global uncertainty and domestic price pressures

    Minutes from BoJ’s March meeting revealed growing concern among policymakers over the external risks posed by US tariff policies.

    One member warned that downside risks from these policies had “rapidly heightened” and could significantly harm Japan’s real economy, suggesting BoJ should “be particularly cautious when considering the timing for the next rate hike.”

    However, not all board members advocated for a cautious stance. Another member stressed that even amid heightened uncertainty, BoJ should not automatically default to a cautious stance, stating that BOJ “might face a situation where it should act decisively”.

    A third voice on the board emphasized the importance of incorporating inflation expectations, upside risks to prices, and progress in wage growth into BoJ’s policy deliberations. Domestic developments could still justify tightening if conditions shift meaningfully.

    Separately, BoJ Governor Kazuo Ueda reinforced this message in his remarks to parliament today, acknowledging that while food price volatility, particularly for rice, remains elevated, these pressures would ease over time.

    Nonetheless, Ueda emphasized the importance of monitoring price developments closely, given the elevated uncertainty in the global economic environment.

    USD/JPY Mid-Day Outlook

    Daily Pivots: (S1) 142.81; (P) 143.40; (R1) 144.43; More…

    USD/JPY rebounded further today but stays below 145.90 resistance. Overall, rise from 139.87 could extend through 145.90. But near term outlook will stay bearish as long as 38.2% retracement of 158.86 to 139.87 at 147.12 holds, in case of another bounce. On the downside, firm break of 141.96 will argue that rebound from 139.87 has completed as a corrective move. Retest of 139.87 should then be seen next in this case.

    In the bigger picture, price actions from 161.94 are seen as a corrective pattern to rise from 102.58 (2021 low), with fall from 158.86 as the third leg. Strong support should be seen from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound. However, sustained break of 139.26 would open up deeper medium term decline to 61.8% retracement at 125.25.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    23:01 GBP RICS Housing Price Balance Apr -3% -4% 2%
    23:50 JPY BoJ Minutes
    06:00 EUR Germany Industrial Production M/M Feb 3.00% 0.80% -1.30%
    06:00 EUR Germany Trade Balance (EUR) Mar 21.1B 18.8B 17.7B
    11:00 GBP BoE Interest Rate Decision 4.25% 4.25% 4.50%
    11:00 GBP MPC Official Bank Rate Votes 2–5–2 0–9–0 0–1–8
    12:30 USD Initial Jobless Claims (May 2) 228K 235K 241K
    12:30 USD Nonfarm Productivity Q1 P -0.80% -0.40% 1.50%
    12:30 USD Unit Labor Costs Q1 P 5.70% 5.30% 2.20%
    14:00 USD Wholesale Inventories Mar F 0.50% 0.50%
    14:30 USD Natural Gas Storage 103B 107B

     



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  • Sterling in Focus as BoE Decision and US-UK Trade Deal Speculation Loom

    Sterling in Focus as BoE Decision and US-UK Trade Deal Speculation Loom


    Trading in the forex markets remains subdued. Fed’s policy announcement overnight triggered minimal market reaction, as it delivered a widely expected hold at 4.25–4.50%. While Fed acknowledged that risks of both higher unemployment and higher inflation have increased, Chair Jerome Powell made it clear that rate cuts are not imminent.

    “It’s not a situation where we can be preemptive,” Powell emphasized, reinforcing Fed’s data-dependent stance amid ongoing uncertainty from US tariff policies and their impacts.

    As attention shifts away from Fed, focus turns squarely to the UK, where the BoE is expected to cut rates by 25 bps. Beyond the cut itself, traders will be parsing the vote split and updated economic projections for signals on the pace of future easing.

    Adding a geopolitical dimension to the day’s event risk, there are growing market whispers that a US-UK trade deal will be announced. US President Donald Trump hinted in social media at a “MAJOR TRADE DEAL” to be announced today. While no country was named, sources cited by The Guardian said the deal involves the UK.

    If formalized, it would be the first bilateral agreement by the current US administration since its sweeping tariff actions last month. A deal with Britain is seen as relatively straightforward, especially compared to more contentious and prolonged negotiations expected with the EU and China. For markets, such a development could inject fresh direction into an otherwise stagnant environment.

    In terms of weekly performance, Yen continues to lead, followed by the Pound and Swiss Franc. On the other end, the Loonie is the weakest, followed by Aussie and Dollar. Euro and Kiwi sit in the middle. However, it should be emphasized that the overall mood remains indecisive, with major pairs and crosses largely trapped within last week’s ranges.

    In Asia, at the time of writing, Nikkei is up 0.53%. Hong Kong HSI is up 0.62%. China Shanghai SSE is up 0.21%. Singapore Strait Times is down -0.26%. Japan 10-year JGB yield is up 0.023 at 1.324. Overnight, DOW rose 0.70%. S&P 500 rose 0.43%. NASDAQ rose 0.27%. 10-year yield fell -0.033 to 4.275.

    Looking ahead, BoE rate decision is the main focus in European session. Later in the day, US will release jobless claims and non-farm productivity.

    BoE to cut, watch vote split and forecasts for dovish signals

    BoE is widely expected to deliver a 25 bps rate cut today, bringing the Bank Rate down to 4.25%. Governor Andrew Bailey and fellow policymakers have consistently emphasized a cautious approach to cutting rates, and that tone is expected to persist amid lingering uncertainties.

    Most economists surveyed by Reuters anticipated BoE will stick to a quarterly pace of easing, suggesting Bank Rate ends the year at 3.75%. However, market participants are slightly more dovish. Traders are now fully pricing in three more cuts by the end of 2025, projecting a rate of 3.50% at year-end.

    There might be some hints on how dovish BoE is leaning to, from today’s vote split and updated economic projections. In particular, focus will fall on whether known dove Swati Dhingra would push for a larger 50bps reduction, and whether there are material downgrades to both growth and inflation forecasts.

    From a market perspective, EUR/GBP will be closely watched for signals on investor sentiment following the decision.

    EUR/GBP is currently testing support at 55 D EMA (now at 0.8460). Strong rebound from current level would keep rally from 0.8239 alive. A break above 0.8539 resistance should confirm that fall from 0.8737, while deep, has completed as a correction. Retest of 0.8737 should be seen next.

    On the flip side, sustained break below the 55 D EMA would raise the risk of near-term bearish reversal, and open the path back toward the 0.8221/0.8239 support zone.

    RBNZ flags global growth risks as tariffs echo COVID-era disruptions

    RBNZ Governor Christian Hawkesby warned today that rising global tariffs are having a clear and negative impact on global economic activity, prompting the central bank to revise down its projections for global growth.

    Speaking to a parliamentary committee, Hawkesby called the effects of the tariff wave “unambiguously” harmful. He added that while New Zealand’s exposure to a 10% US tariff on exports poses challenges, the softer New Zealand Dollar may help cushion some of the blow. Nonetheless, weaker demand from key trading partners is now a growing concern for the country’s outlook.

    Hawkesby drew a stark comparison between the supply-side disruptions caused by current tariffs and those seen during the COVID-19 pandemic, stressing that both are capable of delivering long-lasting economic distortions.

    “We know from our experience, from the COVID experience, that supply side impacts are significant, and that are long-lasting and can create real challenges,” he said.

    He added that the situation remains fluid, with considerable uncertainty about how the structural dynamics of the global economy will adjust to this new trade regime.

    BoJ minutes: Caught between global uncertainty and domestic price pressures

    Minutes from BoJ’s March meeting revealed growing concern among policymakers over the external risks posed by US tariff policies.

    One member warned that downside risks from these policies had “rapidly heightened” and could significantly harm Japan’s real economy, suggesting BoJ should “be particularly cautious when considering the timing for the next rate hike.”

    However, not all board members advocated for a cautious stance. Another member stressed that even amid heightened uncertainty, BoJ should not automatically default to a cautious stance, stating that BOJ “might face a situation where it should act decisively”.

    A third voice on the board emphasized the importance of incorporating inflation expectations, upside risks to prices, and progress in wage growth into BoJ’s policy deliberations. Domestic developments could still justify tightening if conditions shift meaningfully.

    Separately, BoJ Governor Kazuo Ueda reinforced this message in his remarks to parliament today, acknowledging that while food price volatility, particularly for rice, remains elevated, these pressures would ease over time.

    Nonetheless, Ueda emphasized the importance of monitoring price developments closely, given the elevated uncertainty in the global economic environment.

    GBP/USD Daily Outlook

    Daily Pivots: (S1) 1.3254; (P) 1.3318; (R1) 1.3357; More…

    Range trading continues in GBP/USD and intraday bias remains neutral at this point. On the downside, firm break of 1.3232 support will indicate short term topping and rejection by 1.3433 key resistance. Intraday bias will be back on the downside for deeper pullback to 55 D EMA (now at 1.3051) and possibly below. On the upside, decisive break of 1.3433 key resistance will confirm larger up trend resumption.

    In the bigger picture, price actions from 1.3433 are seen as a corrective pattern to the up trend from 1.3051 (2022 low). Rise from 1.2099 could either be resuming the up trend, or the second leg of a consolidation pattern. Overall, GBP/USD should target 1.4248 key resistance (2021 high) on decisive break of 1.3433 at a later stage.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    23:01 GBP RICS Housing Price Balance Apr -3% -4% 2%
    23:50 JPY BoJ Minutes
    06:00 EUR Germany Industrial Production M/M Feb 3.00% 0.80% -1.30%
    06:00 EUR Germany Trade Balance (EUR) Mar 21.1B 18.8B 17.7B
    11:00 GBP BoE Interest Rate Decision 4.25% 4.50%
    11:00 GBP MPC Official Bank Rate Votes 0–9–0 0–1–8
    12:30 USD Initial Jobless Claims (May 2) 235K 241K
    12:30 USD Nonfarm Productivity Q1 P -0.40% 1.50%
    12:30 USD Unit Labor Costs Q1 P 5.30% 2.20%
    14:00 USD Wholesale Inventories Mar F 0.50% 0.50%
    14:30 USD Natural Gas Storage 103B 107B

     



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  • From Trade War to Bond Shock: Global Markets Face Multi-Front Crisis

    From Trade War to Bond Shock: Global Markets Face Multi-Front Crisis


    The relentless selling pressure in global markets shows no sign of abating, with European stocks and US futures once again under fire today. China’s latest retaliatory move to hike tariffs on US goods from 34% to 84% has reignited investor fears, just as the US implemented its own increase to a staggering 104% on Chinese imports. The ongoing trade war escalation between the world’s two largest economies is now moving rapidly from trade tension to a global financial shock.

    China is clearly signaling it has no intention of backing down. Beyond higher tariffs, Beijing’s commerce ministry added multiple US entities to an export control list and labeled several more as “unreliable.” It also filed a pointed complaint with the WTO, accusing Washington’s “reckless move” of destabilizing global trade.

    An unusual element of this market meltdown is the rare simultaneous collapse of all major US assets: stocks, Dollar, and Treasuries. In particular, yields on the 10-year note have surged back above 4.4%, up from 3.9% just last week. This sharp move has sparked fears of forced liquidation, margin calls on leveraged positions, which could drastically tighten up liquidity in the markets.

    Market watchers have floated multiple theories as explanations for the sudden jump in yields. Some see it as a predictable consequence of the US push to reduce bilateral trade imbalances, which may curb or even reverse foreign demand for American debt. Besides, Treasuries could become a retaliatory tool in a geopolitical standoff. While each theory differs in detail, all point to an erosion of liquidity and confidence in a market once considered the bedrock of global finance.

    Technically, 10-year yield’s break above 4.387 resistance is alarming. It suggests that fall from 4.809 has completed as a three-wave corrective move at 3.886. Risk will now stay heavily on the upside as long as 55 D EMA (now at 4.321) holds. Further rally could be seen back to 4.809 resistance. Firm break there could pave the way back to 4.997 high.

    In the currency markets, Dollar is again the worst performer of the day. Sterling and Kiwi trail close behind, the latter pressured further by RBNZ’s rate cut and its dovish forward guidance. Yen and Swiss Franc are once again the preferred safe havens, with the Aussie showing surprising resilience—likely more a pause in its decline than a sign of strength. Euro and Loonie sit somewhere in the middle.

    At the time of writing, FTSE is down -3.57%. DAX is down -4.03%. CAC is down -4.07%. UK 10-year yield is up 0.199 at 4.818. Germany 10-year yield is down -0.005 at 2.622. Earlier in Asia, Nikkei fell -3.93%. Hong Kong HSI rose 0.68%. China Shanghai SSE rose 1.31%. Singapore Strait Times fell -2.18%. Japan 10-year JGB yield rose 0.003 to 1.282.

    ECB’s Villeroy: Trade uncertainty threatens financial stability, strengthens case for rate cut

    French ECB Governing Council member Francois Villeroy de Galhau warned today that mounting economic uncertainty from escalating trade tensions is posing risks to financial stability, particularly increasing credit risks for some financial institutions.

    While he emphasized the resilience of French banks, he noted that leveraged hedge funds could come under significant liquidity pressure.

    Writing in his annual letter to President Macron, Villeroy assured that both Bank of France and ECB are “fully mobilised” to safeguard financial stability and ensure adequate liquidity.

    Speaking to journalists, Villeroy said the recent US announcement of sweeping “reciprocal” tariffs only adds to the case for further monetary easing. “We still have room to cut rates,” he stated.

    ECB’s Knot: Trade war a stagflationary shock, inflation impact will rise over time

    Dutch ECB Governing Council member Klaas Knot warned today that the escalating trade war constitutes a “negative supply shock” and should be considered “stagflationary” in nature.

    Knot also cautioned that as time progresses, the economic impact is more likely to “more inflationary rather than deflationary”.

    ECB’s priority, he said, is to monitor how and when these tariffs start to meaningfully affect economic activity and corporate decision-making. However, next week’s policy meeting would be too soon to revise projections.

    Knot also noted that despite the growing market stress, financial market functioning has so far been “preserved”. He credited the hedge fund sector’s proactive deleveraging for this resilience, saying they were well-prepared for the turbulence and capable of meeting margin calls—unlike in past market episodes.

    BoJ’s Ueda: Rate hikes still on table, but trade uncertainty clouds outlook

    BoJ Governor Kazuo Ueda reaffirmed today that the central bank remains open to further rate hikes if Japan’s economic recovery continues as projected. He added that current trends in both the economy and inflation are “roughly in line” with BoJ’s forecasts.

    He added that the policy board will make decisions with a “without pre-conception” mindset, and assess whether the outlook materializes as expected.

    However, Ueda flagged growing concerns over trade developments globally, warning of “heightening uncertainty over developments in each country’s trade policy”.

    “We need to pay due attention to risks,” he warned.

    RBNZ cuts 25bps, trade barriers as downside risk to both growth and inflation

    RBNZ delivered a widely expected 25bps cut in the Official Cash Rate, bringing it to 3.50%. The policy statement highlighted that the recently announced global trade barriers create “downside risks to the outlook for economic activity and inflation” in New Zealand.

    The central bank noted that with inflation close to the midpoint of its target range, it is in the “best position” to respond to economic shifts. RBNZ added it has “has scope to lower the OCR further as appropriate”, depending on how the impact of tariffs evolves.

    This leaves the door wide open for further easing, particularly if global economic headwinds intensify or domestic data disappoints.

    USD/JPY Mid-Day Outlook

    Daily Pivots: (S1) 145.46; (P) 146.79; (R1) 147.61; More…

    Intraday bias in USD/JPY is back on the downside with break of 144.54 support. Fall from 158.86 is resuming to 158.86 to 146.52 from 151.20 at 143.57. Break there will target 139.57 low. On the upside, break of 148.13 resistance is needed to indicate short term bottoming. Otherwise, risk will stay on the downside in case of recovery.

    In the bigger picture, price actions from 161.94 are seen as a corrective pattern to rise from 102.58 (2021 low), with fall from 158.86 as the third leg. Strong support should be seen from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound. However, sustained break of 139.26 would open up deeper medium term decline to 61.8% retracement at 125.25.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    02:00 NZD RBNZ Interest Rate Decision 3.50% 3.50% 3.75%
    05:00 JPY Consumer Confidence Index Mar 34.1 34.9 35
    06:00 JPY Machine Tool Orders Y/Y Mar P 11.4% 3.50%
    14:00 USD Wholesale Inventories Feb F 0.30% 0.30%
    14:30 USD Crude Oil Inventories 2.2M 6.2M
    18:00 USD FOMC Minutes

     



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  • Reciprocal Tariffs Take Effect; China Hit with 104% Rate

    Reciprocal Tariffs Take Effect; China Hit with 104% Rate


    The rebound in US stock markets proved short-lived, with major indexes slipping back into the red by the end of Tuesday’s session. NASDAQ led the losses, as sentiment turned increasingly fragile. Asian markets followed suit, opening lower with large intraday volatility across the region. Concerns about a global recession continue to weigh heavily on investors’ minds, particularly as the commodity complex offers no reprieve—oil prices plunged to fresh four-year lows on fears of a steep demand collapse.

    Gold, traditionally a safe haven, is fighting to hold above the 3000 psychological level. The safe-haven metal has been benefiting from the market’s defensive posture. In the currency space, Dollar extended its slide, joined by other risk-sensitive currencies including Aussie, Kiwi and Loonie. Sterling wasn’t spared either. Meanwhile, Euro, Yen, and Swiss Franc are holding firm as traders flock toward relative safety amid escalating trade tensions.

    The key driver of current market anxiety is the formal implementation of US reciprocal tariffs today, with the most aggressive action aimed at China. An eye-watering 104% effective tariff rate now applies to Chinese imports, effectively escalating the bilateral conflict into a full-blown trade war. Adding fuel to the fire, US President Donald Trump signed an executive order tripling tariff rates on low-value Chinese packages shipped through international postal systems.

    This rapidly escalating standoff between the world’s two largest economies marks a dangerous phase in global trade, with both nations seemingly unwilling to blink first. The economic fallout remains difficult to quantify at this stage, but the longer the impasse drags on, the more serious the risks to global growth and supply chains. Perhaps most troubling is the collateral damage to third-party nations, which are now caught between the crosshairs of US-China economic warfare.

    More tariff action is on the horizon. Adding more fuel to the fire, Trump indicated during a political dinner that a major new round of tariffs targeting pharmaceuticals would be announced “very shortly.” These measures are expected to be aimed at shifting pharmaceutical production out of China and back into the US, with rates speculated to reach 25% or higher. The move has sparked concern not only about inflation in drug prices but also about global supply chain disruptions in the healthcare sector.

    Elsewhere, Canada confirmed its retaliation, implementing 25% tariffs on US-made vehicles. Japan, another major trading partner, is bracing for heightened scrutiny. Finance Minister Katsunobu Kato noted that exchange rate policies may enter upcoming discussions, indicating that Washington’s pressure on currencies—particularly Yen—could be a brewing flashpoint.

    Technically, an immediate focus in on 1.0741 in GBP/CHF as selloff accelerates further this week. Firm break there will solidify the case that corrective pattern from 1.0183 has already completed, be it counted as at 1.1675 or 1.1501. Larger down trend should then be ready to resume through 1.0183 (2022 low).

    In Asia, at the time of writing, Nikkei is down -4.14%. Hong Kong HSI is down -1.43%. China Shanghai SSE is up 0.21%. Singapore Strait Times is down -2.44%. Japan 10-year JGB yield is down -0.024 at 1.255. Overnight, DOW fell -0.84%. S&P 500 fell -1.57%. NASDAQ fell -2.15%. 10-year yield rose 0.107 to 4.262.

    RBNZ cuts 25bps, trade barriers as downside risk to both growth and inflation

    RBNZ delivered a widely expected 25bps cut in the Official Cash Rate, bringing it to 3.50%. The policy statement highlighted that the recently announced global trade barriers create “downside risks to the outlook for economic activity and inflation” in New Zealand.

    The central bank noted that with inflation close to the midpoint of its target range, it is in the “best position” to respond to economic shifts. RBNZ added it has “has scope to lower the OCR further as appropriate”, depending on how the impact of tariffs evolves.

    This leaves the door wide open for further easing, particularly if global economic headwinds intensify or domestic data disappoints.

    NZD/USD edged lower earlier today with broad risk aversion, but there is no particular selloff after RBNZ’s decision.

    Technically, the breach of 0.5515 support suggests that recent fall from 0.6378 is resuming. Near term risk will stay on the downside as long as 0.5644 resistance holds. Next target is 61.8% projection of 0.6378 to 0.5515 from 0.5852 at 0.5319.

    But more importantly, sustained trading below 0.5467 (2020 low) would confirm resumption of whole downtrend from 0.8835 (2014 high). That would pave the way to 61.8% projection of 0.7463 to 0.5511 from 0.6378 at 0.5172 in the medium term.

    Fed’s Goolsbee: Tariff shock far exceeds expectations; Daly calls for caution

    Chicago Fed President Austan Goolsbee and San Francisco Fed President Mary Daly both sounded cautious overnight amid rising uncertainty from the unfolding global tariff war.

    Goolsbee highlighted the unexpected magnitude of the tariff impact, calling them a “way bigger” shock than anticipated. He likened them to a “negative supply shock” and acknowledged that Fed’s appropriate policy response is unclear.

    He warned of ripple effects through slower consumer and business activity, especially in a post-pandemic economy still scarred by past inflationary surges.

    Meanwhile, Daly struck a more measured tone, noting that while she is “a little concerned” about the inflationary effects of tariffs, she emphasized Fed’s current policy is well-positioned and policymarkers can “just tread slowly and tread carefully.”

    “The thing that’s really important is you stay steady in the boat while you think about not what’s happening over the last two days, but the net effect of the slate of changes that any administration wants to take,” she added.

    EUR/AUD Daily Outlook

    Daily Pivots: (S1) 1.8097; (P) 1.8259; (R1) 1.8560; More…

    EUR/AUD’s rally resumed after brief retreat and intraday bias is back on the upside. Current up trend should target 161.8% projection of 1.6355 to 1.7417 from 1.7047 at 1.8765 next. On the downside, below 1.7957 minor support could now indicate short term topping, possibly on bearish divergence condition in 4H MACD, and bring lengthier consolidations.

    In the bigger picture, up trend from 1.4281 (2022 low) is in progress, and in reacceleration phase as seen in W MACD. Next target is 100% projection of 1.4281 to 1.7062 from 1.5963 at 1.8744. Firm break there will pave the way to 138.2% projection at 1.9806, which is close to 1.9799 (2020 high). Outlook will remain bullish as long as 1.7417 resistance turned support holds even in case of deep pullback.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    02:00 NZD RBNZ Interest Rate Decision 3.50% 3.50% 3.75%
    05:00 JPY Consumer Confidence Index Mar 34.1 34.9 35
    06:00 JPY Machine Tool Orders Y/Y Mar P 3.50%
    14:00 USD Wholesale Inventories Feb F 0.30% 0.30%
    14:30 USD Crude Oil Inventories 2.2M 6.2M
    18:00 USD FOMC Minutes

     



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  • Reserve Bank Of New Zealand Cuts Rate By 25 Bps, Signals Further Easing

    Reserve Bank Of New Zealand Cuts Rate By 25 Bps, Signals Further Easing


    The Reserve Bank of New Zealand reduced its benchmark rate by a quarter-point, as expected on Wednesday, and hinted at further easing as recent increases in trade tariffs pose downside risks to economic outlook.

    The Monetary Policy Committee, led by acting governor Christian Hawkesby, decided to cut the Official Cash Rate by 25 basis points to 3.50 percent, which was the lowest since October 2022.

    The committee observed that a 25 basis-point reduction would be consistent with the mandate of maintaining low and stable inflation.

    “As the extent and effect of tariff policies become clearer, the Committee has scope to lower the OCR further as appropriate,” the bank said.

    “Future policy decisions will be determined by the outlook for inflationary pressure over the medium term,” RBNZ added.

    The bank noted that inflation remains near the mid-point of the 1 to 3 percent target range and economic activity evolved largely as expected since the February meeting.

    Nonetheless, the recently announced trade tariffs create downside risks to the outlook for economic activity as well as inflation in New Zealand, the bank said.

    Capital Economics economist Abhijit Surya said the Committee will probably continue to move in 25 bps increments going forward.

    However, as downside risks to inflation start to eventuate over the coming months, there will be a compelling case for the central bank to cut rates further than most are predicting, the economist added.

    For comments and feedback contact: editorial@rttnews.com

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  • New Zealand’s RBNZ set to trim interest rate for fifth meeting in a row

    New Zealand’s RBNZ set to trim interest rate for fifth meeting in a row


    • The Reserve Bank of New Zealand is set to lower the interest rate by 25 bps to 3.5% on Wednesday.
    • In February, the RBNZ left the door open for further cuts, anticipating the negative impact of US tariffs.
    • The New Zealand Dollar could experience intense volatility following the RBNZ’s policy announcements.

    The Reserve Bank of New Zealand (RBNZ) is on track to deliver a 25 basis point (bps) cut to the Official Cash Rate (OCR), bringing down the key policy rate from 3.75% to 3.50% following its April monetary policy meeting on Wednesday. The decision is fully priced in and will be announced at 02:00 GMT.

    Therefore, the language in the RBNZ’s policy statement will be closely scrutinized for fresh insights on future rate cuts, which could significantly impact the performance of the New Zealand Dollar (NZD).

    What to expect from the RBNZ interest rate decision?       

    The RBNZ has already cut by 175 basis points since August last year, with the former Governor Adrian Orr having left the door open for rate cuts in April and May while addressing his post-policy meeting press conference in February.

    At its February meeting, the central bank said that “there is a risk of increased trade barriers and broader geoeconomic fragmentation,” adding that “an increase in trade restrictions is likely to reduce economic activity in New Zealand.”

    Earlier this month, United States (US) President Donald Trump announced his long-awaited reciprocal tariffs, with China hit by additional 34% levies while New Zealand faces 10% tariffs. The Pacific Nation said it will not retaliate. China leads the US as New Zealand’s top export market.

    Although the direct impact of US tariffs on New Zealand’s economy is likely to be limited, the tariffs will probably lower growth in the country’s main trading partners, including Australia and China, eventually acting as a headwind to the South Pacific Island nation.

    The gloomier outlook on global growth could prompt the bank to retain its easing bias, with markets now expecting the OCR to bottom out at 2.75%, compared to 3% a week ago.

    How will the RBNZ interest rate decision impact the New Zealand Dollar?

    The NZD/USD pair is recovering from five-year troughs near 0.5500 in the run-up to the RBNZ showdown.

    The short-covering or profit-booking rally in the pair could gather steam following the RBNZ’s expected 25 bps rate decision.

    The Kiwi Dollar could built on its recent recovery if the RBNZ warns of higher inflation due to tariffs, sounding cautious on the scope of future rate cuts.

    However, amidst escalating US-China trade war and the associated risks to New Zealand’s economy, should the RBNZ surprise with a 50 bps rate cut, the New Zealand Dollar (NZD) will likely crumble against the US Dollar (USD). 

    “The NZD/USD pair remains exposed to downside risks as the 14-day Relative Strength Index (RSI) remains well below the 50 level, despite the latest uptick. If the downtrend resumes, the initial support is at the five-year low of 0.5506, below which the March 2020 low of 0.5470 will be targeted. If the selling pressure intensifies, the last line of defense for buyers is seen at the 0.5450 psychological level.”

    Any recovery attempt in the pair will require acceptance above the critical confluence resistance around the 0.5700 region, where the 21-day Simple Moving Average (SMA), the 50-day SMA, and the 100-day SMA converge. Further up, the April 4 high of 0.5803 will be tested en route to the 200-day SMA at 0.5894,” Dhwani adds.  

    New Zealand Dollar PRICE This month

    The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies this month. New Zealand Dollar was the weakest against the Swiss Franc.

    USD EUR GBP JPY CAD AUD NZD CHF
    USD -1.21% 1.23% -1.77% -1.47% 3.06% 1.43% -2.82%
    EUR 1.21% 2.41% -0.58% -0.32% 4.26% 2.62% -1.67%
    GBP -1.23% -2.41% -2.95% -2.67% 1.79% 0.18% -4.00%
    JPY 1.77% 0.58% 2.95% 0.30% 4.91% 3.23% -1.06%
    CAD 1.47% 0.32% 2.67% -0.30% 4.59% 2.95% -1.37%
    AUD -3.06% -4.26% -1.79% -4.91% -4.59% -1.57% -5.70%
    NZD -1.43% -2.62% -0.18% -3.23% -2.95% 1.57% -4.19%
    CHF 2.82% 1.67% 4.00% 1.06% 1.37% 5.70% 4.19%

    The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the New Zealand Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent NZD (base)/USD (quote).

    New Zealand Dollar FAQs

    The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.

    The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.

    Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.

    The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.



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  • Markets Catch a Breath, But US-China Showdown Keep Rebound on Thin Ice

    Markets Catch a Breath, But US-China Showdown Keep Rebound on Thin Ice


    Global markets are having a precious moment of calm, with risk sentiment stabilizing across Asia and Europe, and US futures pointing to a higher open. The recent wave of aggressive selling appears to have peaked—at least temporarily—offering traders a breather from the huge volatility experienced since last week. However, this rebound should not be mistaken for a true reversal in sentiment. Markets remain highly sensitive, and downside risks persist should trade tensions escalate further.

    The immediate flashpoint lies in US-China relations. US President Donald Trump has warned that if China does not withdraw its 34% retaliatory tariffs by Wednesday, the US will impose an additional 50% tariff on Chinese goods. Should that happen, the effective tariff rate on Chinese imports would soar beyond 100%, marking a significant and historic escalation in global trade conflict.

    Meanwhile, Chinese authorities are making visible efforts to bolster domestic market confidence. Sovereign wealth fund Central Huijin Investment, often dubbed the “national team,” confirmed ETF purchases and pledged further action to support equity prices. This has been echoed by major state-owned enterprises and listed firms announcing share buybacks. In tandem, China’s financial regulator is preparing to lift caps on insurance fund investments in equities to provide further support to the capital markets.

    Beyond equity stabilization, currency markets are on alert. The Chinese Yuan is nearing record lows against Dollar, with market speculations over whether Beijing will allow it to depreciate as a countermeasure to tariffs. Should the PBoC relax its grip and let the Yuan slide further, it could trigger fresh turbulence in the regional markets that ripples globally.

    From a pure technical perspective, USD/CNH’s correction from 7.3964 should have completed at 7.2153 already. Firm break of 7.3964/3745 key resistance zone will quickly push USD/CNH to 61.8% projection of 6.9709 to 7.3694 from 7.2153 at 7.4616.

    In Europe, at the time of writing, FTSE is up 2.54%. DAX is up 2.57%. CAC is up 2.34%. UK 10-year yield is up 0.029 at 4.636. Germany 10-year yield is up 0.056 at 2.667. Earlier in Asia, Nikkei rose 6.03%. Hong Kong HSI rose 1.51%. China Shanghai SSE rose 1.58%. Singapore Strait Times fell -2.01%. Japan 10-year JGB yield rose 0.163 to 1.279.

    ECB’s de Guindos urges cool heads as Europe faces trade wake-up call

    ECB Vice-President Luis de Guindos struck a cautiously hopeful tone on Europe’s ability to manage rising global trade tensions, suggesting that markets tend to overreact in the short term but eventually recalibrate.

    Speaking at an event in Spain, de Guindos noted that despite the sharp volatility triggered by the US tariff escalation, market liquidity remains intact.

    Despite the pressure, de Guindos said he was “relatively optimistic” about Europe’s ability to weather the storm, calling the situation a “wake-up call” to pursue greater economic and military autonomy.

    De Guindos stressed the importance of negotiating with the U.S. “with a cool head”.

    Separately, Greek ECB Governing Council member Yannis Stournaras offered a more cautious view, warning that a renewed surge in inflation or rising inflation expectations could disrupt ECB’s path to monetary policy normalization.

    “Tariffs imposed on one country’s imports would affect other countries participating in the global chains, even if no countermeasures were imposed,” Stournaras added.

    Aussie Westpac consumer sentiment slumps post-tariff shock; RBA seen tilting toward May rate cut

    Australia’s Westpac Consumer Sentiment index plunged -6.0% in April, dropping from 95.9 to 90.1. The steep fall was notably skewed by the timing of the survey in relation to US announcement of reciprocal tariffs on April 2.

    Respondents surveyed before the announcement showed only a modest dip in sentiment to 93.9. Those surveyed after reported a sharp drop of nearly 10% to 86.6. .

    The sub-indices measuring sentiment towards the economy were particularly hard-hit, with the outlook for the next 12 months falling -5.7% to 90.5, and the 5-year outlook slipping back by -3.0%

    With RBA set to meet on May 19-20, Westpac believes the weakening external backdrop, coupled with softer inflation, will push RBA to deliver another 25 bps rate cut. RBA is likely to become “much more focused on downside risks to growth than lingering questions about inflation”.

    Australia NAB business confidence dips to -3 ahead of tariff impact

    Australia’s NAB Business Confidence index dipped slightly from -2 to -3 in March, remaining firmly in negative territory. Business Conditions, however, edged up from 3 to 4, a modest improvement that still leaves them slightly below average overall.

    Cost pressures remained broadly stable, with purchase costs rising 1.4% in quarterly equivalent terms and product price growth holding at 0.5%. Labour cost growth eased slightly.

    NAB Chief Economist Sally Auld noted that conditions continue to vary across industries, with the services sector faring best while manufacturing and retail remain under pressure.

    Importantly, this data predates the escalation of the global trade dispute, particularly the reciprocal tariff measures announced in early April. As Auld cautioned, these developments could “flow through to forward looking measures in the next survey.”

    RBNZ set to cut again, bearish momentum resumes in NZD/JPY

    RBNZ is widely expected to deliver another 25bps cut tomorrow, bringing the Official Cash Rate down to 3.50%. With the move largely priced in, traders will be focused on how the central bank interprets the rapidly evolving global environment.

    As the first major central bank to meet since the US launched the sweeping reciprocal tariffs, RBNZ’s tone and guidance will not only be key for New Zealand, but will also offer insights for the broader Asia-Pacific region.

    While there are speculative whispers about the possibility of a larger-than-expected rate cut to cushion the economy against the external shock, RBNZ will likely refrain from doing so just yet. The current level of uncertainty, both in terms of policy responses and economic impact, should see the central bank remain cautious, maintaining its easing bias without overcommitting.

    With another cut already projected in May, RBNZ is expected to stay on its path of gradual policy accommodation while waiting for more concrete data on trade disruption effects. The question of whether the RBNZ will eventually push OCR below 3.00% remains open. Much will depend on how the trade war unfolds, how consumer and business sentiment hold up, and the extent of the ripple effects across Asia’s open economies.

    Technically, NZD/JPY’s down trend from 99.01 (2024 high) resumed by breaking through 83.02 low last week. Whether this is a correction of the multi-year uptrend from the 2020 low of 59.49, or a full reversal, is yet to be determined.

    In either case, near term outlook will remain bearish as long as 87.35 resistance holds, in case of recovery. Next target is 100% projection of 92.45 to 83.14 from 87.35 at 78.04. Firm break there will target 138.2% projection at 74.48. This coincides with 61.8% retracement of 59.49 to 99.01 at 74.58.

    USD/CHF Mid-Day Outlook

    Daily Pivots: (S1) 0.8480; (P) 0.8577; (R1) 0.8704; More…

    Intraday bias in USD/CHF remains neutral for the moment, and more consolidations would be seen above 0.8450. Upside of recovery should be limited below 0.8757 support turned resistance. On the downside, below 0.8450 will resume the fall from 0.9196 and target 100% projection of 0.9196 to 0.8757 from 0.8854 at 0.8415.

    In the bigger picture, rejection by 0.9223 key resistance keep medium term outlook bearish. That is, larger fall from 1.0342 (2017 high) is not completed yet. Firm break of 0.8332 (2023 low) will confirm down trend resumption. Next target is 61.8% projection of 1.0146 (2022 high) to 0.8332 from 0.9196 at 0.8075.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    22:00 NZD NZIER Business Confidence Q1 19% 16%
    23:50 JPY Current Account (JPY) Feb 2.32T 2.74T 1.94T 1.95T
    00:30 AUD Westpac Consumer Sentiment Apr -6.00% 4.00%
    01:30 AUD NAB Business Confidence Mar -3 -1 -2
    01:30 AUD NAB Business Conditions Mar 4 4
    05:00 JPY Eco Watchers Survey: Current Mar 45.1 45.3 45.6
    06:45 EUR France Trade Balance (EUR) Feb -7.9B -6.2B -6.5B
    10:00 USD NFIB Business Optimism Index Mar 97.4 101.3 100.7
    14:00 CAD Ivey PMI Mar 53.2 55.3

     



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  • Markets Crumble as Trump Doubles Down on Tariffs, Trade Storm Intensifies

    Markets Crumble as Trump Doubles Down on Tariffs, Trade Storm Intensifies


    The global stock market crash showed no sign of slowing today. Hong Kong’s Hang Seng Index returned from a holiday break and promptly plunged over -10% to catch up with last week’s global carnage. Meanwhile, Japan’s Nikkei suffered another dramatic drop of more than -2200 points, or -6.6%.

    Risk aversion remains the dominant theme as markets digest the full implications of the rapidly escalating trade war. Despite the equity bloodbath, currency markets were relatively calm. Most major pairs and crosses pulled back inside Friday’s ranges after brief spikes.

    Fueling the unease, US President Donald Trump showed no sign of backing away from his aggressive tariff agenda. Over the weekend, he defended the tariffs, likening them to “medicine to fix something” and insisted that countries wishing to avoid the duties must pay the US “a lot of money on a yearly basis.” Treasury Secretary Scott Bessent added that more than 50 countries have opened negotiations with Washington since last week’s announcement, suggesting Trump’s strategy is drawing some to the table.

    Indeed, some notable trade partners are quickly moving to avoid being caught in the crosshairs. Taiwan’s President Lai Ching-te offered to remove trade barriers and match US tariffs with zero duties, while also pledging increased Taiwanese investment in America. That follows Vietnam’s similar proposal last week, raising the possibility that some nations could strike bilateral deals that eliminate tariffs entirely.

    The next few days will be critical. Traders are watching closely to see if any of these bilateral talks bear fruit — specifically, whether they lead to a genuine dismantling of trade barriers. On the other hand, if the US uses these negotiations to extract unrelated concessions, trust may erode further, heightening fears of a full-blown trade conflict.

    The path taken by Taiwan and Vietnam could become a model or a dead-end, depending on how Washington responds. The situation remains extremely fluid as US customs began collecting the baseline 10% tariffs over the weekend, with higher country-specific rates kicking in Wednesday.

    Fed will also be back in the spotlight, with the March FOMC minutes, CPI data, and fresh commentary from policymakers due. Up until last week, Fed officials were signaling a cautious, wait-and-see approach on rate cuts. But the financial market rout has dramatically altered expectations, with Fed funds futures now pricing in nearly a 50% chance of a 25bps cut in May — up from just 14% a week ago.

    A soft CPI print or any hint of dovish pivot in tone from Fed could further fuel expectations of imminent easing—though it would also raise concern that Fed is bracing for deeper economic damage from the trade war

    In Asia, at the time of writing, Nikkei is down -5.99%. Hong Kong HSI is down -10.50%. China Shanghai SSE is down -6.39. Singapore Strait Times is down -7.85%. Japan 10-year JGB yiield is down -0.037 at 1.119.

    Japan’s real wages fall again despite nominal pay boost from bonuses

    Japan’s nominal wages rose 3.1% yoy in February, a notable jump from downwardly revised 1.8%yoy in January, matching expectations.

    However, this strong print was largely driven by a surge in special payments, which skyrocketed 77.4% yoy. Regular pay, considered a more stable indicator of wage trends, actually slowed to 1.6% yoy from the prior month’s 2.1% yoy, signaling only moderate momentum in base salary growth.

    Despite the upbeat headline figure, real wages—which adjust for inflation—fell for the second consecutive month, down -1.2% yoy. This came as consumer inflation, as calculated by the labor ministry, remained elevated at 4.3% yoy, down slightly from January’s 4.7% yoy.

    Gold rebounds from sub-3000 dip as market panic deepens in Asia

    Gold had a shaky start to the week, being dragged below 3000 psychological level briefly, alongside broader risk asset liquidation. But as stock markets across Asia extended their crash into Monday, the precious metal caught some safe haven flows and bounced back above 3030 quickly.

    Meanwhile, a critical 2950/60 zone appears to be providing strong support for Gold too. Reaction to this zone would unveil whether the intensifying global trade tensions and deepening equity losses are re-anchoring Gold as a defensive asset.

    The 2950/60 zone marks the confluence of 2956.09 resistance turned support, 38.2% retracement of 2832.41 to 3167.62 at 2960.46, and trend line support at 2957.62.

    Technically, break above 55 4H EMA (now at 3075.81) will set the range for sideway consolidations. That would also keep outlook bullish for extending the long term up trend at a later stage.

    However, sustained break of 2950/60 will argue that Gold is also in medium term correction, with risk of falling back to 2584.24/2789.92 support zone.

    WTI oil breaches 60 as trade war and OPEC+ output plans weigh

    Oil prices extended their steep losses in Asian trading today, with WTI crude briefly dipping below the psychological level of 60 for the first time in nearly four years.

    The persistent global equity selloff and deepening concerns over the economic fallout from the trade war have triggered fears about demand destruction, which remains difficult to quantify. Until there’s clarity on how much global consumption will be impacted, markets are likely to remain under pressure.

    Adding to the bearish tone, OPEC+ announced last week that it would advance the timeline for increasing output, with plans to raise production by 411,000 barrels per day starting in May, compared to the previous plan of just 135,000 bpd. The supply boost, at a time of growing demand concerns, is exacerbating the imbalance and fueling the sharp price decline.

    Technically, WTI oil might find some support at 100% projection of 81.01 to 65.24 from 72.37 at 56.60 to form a short term bottom. However, firm break of 56.60 could quickly push WTI towards 50 psychological level to 138.2% projection at 50.57.

    Fed’s patience faces test with inflation and consumer sentiment; RBNZ to cut again

    The week ahead is packed with key US economic releases and a major central bank decision in New Zealand, all set against the backdrop of escalating global tariff tensions.

    Fed is clearly stuck between a rock and a hard place. This week’s US CPI data might show a slowdown in both headline and core readings. However, with core reading still hovering around 3%, and risk of tariffs boosting inflation in the near term, there is little room for Fed to rush to resume policy easing.

    Meanwhile, markets, business and consumer sentiment has clearly deteriorated to an extent that recession risks are now real. The University of Michigan’s consumer sentiment index will offer a timely snapshot of how households are responding to the reciprocal tariffs that dominated headlines over the past two weeks. The survey window, March 25 through April 7, overlaps with the US announcement and China’s retaliatory move, making it a valuable real-time pulse check on inflation expectations and confidence.

    FOMC minutes are not expected to deliver any surprises. Markets will be keen to learn how much weight the Committee gave to tariff risks during its March discussions. But of course, with reciprocal tariffs now implemented, any earlier assessments may already be outdated. Nevertheless, insights into the range of views within Fed could help shape expectations for the timing of the next policy move.

    On the central banking front, RBNZ is widely expected to cut its policy rate by 25 bps to 3.50%. This move would be in line with RBNZ’s February guidance, which projected two cuts in the first half of the year to keep inflation within the 1–3% target range. The bank sees 3.00% as the neutral rate, meaning policy will remain mildly restrictive even after the cut. Unless economic conditions have materially changed, a deviation from this path would be surprising.

    However, markets will also be watching how the RBNZ responds to recent global turmoil. The US has slapped a 10% tariff on all New Zealand exports, yet Prime Minister Christopher Luxon has stated that New Zealand will not retaliate. Whether the RBNZ views this as a meaningful threat to growth or simply a policy headwind to monitor could influence how aggressively it plans to ease in the second half of the year.

    Here are some highlights for the week:

    • Monday: Japan labor cash earnings; Germany industrial production, trade balance; Swiss foreign currency reserves; Eurozone retail sales, Sentix investor confidence; Canada BOC business outlook survey.
    • Tuesday: Australia Westpac consumer sentiment, NAB business confidence; US NFIB small business index; Canada Ivey PMI.
    • Wednesday: RBNZ rate decision’ Japan consumer confidence; US FOMC minutes.
    • Thursday: Japan PPI; China CPI, PPI; US CPI, jobless claims.
    • Friday: New Zealand BNZ manufacturing; Germany CPI final; UK GDP, production, trade balance; US PPI, U of Michigan consumer sentiment.

    AUD/USD Daily Report

    Daily Pivots: (S1) 0.5907; (P) 0.6120; (R1) 0.6252; More…

    Intraday bias in AUD/USD stays on the downside for the moment. Current fall from 0.6941 should target 61.8% projection of 0.6941 to 0.6087 from 0.6388 at 0.5860. On the upside, above 0.6062 minor resistance will turn intraday bias neutral and bring consolidations first.

    In the bigger picture, fall from 0.6941 (2024 high) is seen as part of the down trend from 0.8006 (2021 high). Next medium term target is 61.8% projection of 0.8006 to 0.6169 from 0.6941 at 0.5806. In any case, outlook will stay bearish as long as 0.6388 resistance holds.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    23:30 JPY Labor Cash Earnings Y/Y Feb 3.10% 3.10% 2.80% 1.80%
    05:00 JPY Leading Economic Index Feb P 107.9 107.8 108.3
    06:00 EUR Germany Industrial Production M/M Feb -0.90% 2.00%
    06:00 EUR Germany Trade Balance (EUR) Feb 17.8B 16.0B
    07:00 CHF Foreign Currency Reserves (CHF) Mar 735B
    08:30 EUR Eurozone Sentix Investor Confidence Apr -8.7 -2.9
    09:00 EUR Eurozone Retail Sales M/M Feb 0.50% -0.30%
    14:30 CAD BoC Business Outlook Survey

     



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