Fed Minutes Continue to Underscore Fed's Data Dependent Approach

Today's minutes continued to underscore the Fed's willingness to maintain rates at their current levels, giving today's restrictive policy stance more time to work. With Chair Powell and other FOMC members recently acknowledging the "lack of further progress", market pricing for the first-rate cut has been pushed to November.

NZ First Impressions: Retail Trade, March Quarter 2024

Retail spending was much stronger than expected in the March quarter. However, the longer-term trend in spending remains weak.

New Zealand Dollar Rises After Hot Retail Sales Data

The New Zealand dollar is in positive territory on Thursday. NZD/USD is up 0.38%, trading at 0.6120 in the European session at the time of writing. The New Zealand dollar showed some strength after the Reserve Bank of New Zealand rate decision on Wednesday, gaining as much as 1% and hitting a nine-week high. However, the New Zealand dollar couldn’t consolidate and gave up almost all of these gains.

USD/JPY Steady as Japanese PMIs Mixed

The Japanese yen is slightly lower on Thursday. USD/JPY is trading at 156.70, down 0.08% on the day at the time of writing.

Sunset Market Commentary

European May PMIs were generally speaking good. The services reading stabilized at a decent 53.3 in May but a better-than-expected improvement in the admittedly still struggling manufacturing sector (from 45.7 to 47.4) lifted the composite figure to the highest in a year (52.3). S&P Global estimates Q2 growth at 0.3% while projecting an annual 1% growth (with upside) risks for 2024.

Hand in Hand is the Surer Way to Land

This week saw the RBA Board minutes observe that many households have been pulling back on spending even when their incomes have not been falling. We also saw a similar implication from the May release of the Westpac–Melbourne Institute Consumer Sentiment Survey.

Waning Reflation Appetite?

The week hasn’t been pleasant for the market bulls. On Wednesday, the FOMC minutes showed the disturbing truth that ‘many’ Fed members wondered whether keeping the rates ‘high for longer’ was sufficiently restrictive to tame inflation, and if hiking the rates wouldn’t be a better idea.

Japanese Inflation Falling Towards BoJ 2% Inflation Target

Japanese inflation is falling towards the BoJ 2% inflation target but today’s data are unlikely to derail plans to very gradually increase the policy rate with strong wage gains (>5% for large companies) expected to spur spending and inflation.

Canadian Dollar Eyes Retail Sales

The Canadian dollar is unchanged on Friday. USD/CAD is trading at 1.3726 in the European session at the time of writing at the time. Canada releases retail sales later, which may trigger some volatility in the North American session. The US will release durable goods and consumer confidence data.

Ethereum: Too Soon to Say Goodbye to $3000

Ethereum’s sell-off on positive news is a typical “buy the rumours, sell the facts” reaction of speculators. We saw the same in January after the approval of the Bitcoin ETF, which took 19% off its price in the following two weeks before there was a spectacular reversal.