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Good Morning Traders

  • US indices finished yesterday’s trading lower following a weak-ish data on factory orders and job openings
  • S&P 500 dropped 0.58%, Dow Jones moved 0.59% lower and Nasdaq declined 0.52%. Small-cap Russell 2000 was top laggard with a 1.81% drop
  • 10-year US yield pulled back to 3.30% as market odds for Fed hike continued to drop. Money markets are now 50-50 split between 25 bp rate hike and no change at May meeting
  • Indices from Asia-Pacific traded mixed today – Nikkei dropped 1.7%, S&P/ASX 200 moved 0.1% lower, Kospi gained 0.6% and Nifty 50 added 0.5%
  • DAX futures point to a more or less flat opening of the European cash session today
  • NZD outperforms other G10 currencies following a hawkish surprise from the Reserve Bank of New Zealand. RBNZ hiked official cash rate by 50 bp to 5.25% while market expected a 25 bp rate hike
  • RBNZ also noted that more rate hikes are needed in order to meet 1-3% inflation target
  • RBA Governor Lowe said that yesterday’s decision to keep rates unchanged does not mean that rate hike cycle in Australia is over and that some more tightening may still be needed
  • China announced that it will hold naval drills in Taiwan Strait in response to Taiwanese president meeting with US officials in the United States
  • According to Fed Mester, rates in the United States will need to be hiked above 5% and kept there for some time to help bring down inflation
  • Australian services PMI dropped from 50.7 to 48.6 in March (exp. 48.2)
  • API report pointed to a 4.35 million barrel drop in US oil inventories (exp. -1.8 mb)
  • Cryptocurrencies trade higher – Dogecoin gains 2.5%, Ethereum trades 2.3% higher and Bitcoin jumps 1.2%
  • Energy commodities trade slightly higher – oil gains 0.1% while US natural gas prices trade 0.5% higher
  • Precious metals trade mixed – silver drop 0.1%, gold gains 0.1% while platinum and palladium jump 1%
  • NZD and JPY are the best performing major currencies while AUD and GBP lag the most

NZDUSD jumped and tested 0.6365 area following a bigger-than-expected RBNZ rate hike. Source: xStation5

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