Australian Dollar Eyes RBA Minutes

The Aussie is coming off an excellent week, gaining 1.36% and hitting its highest level since January. In the month of May, AUD/USD has surged 3.4%.

Bitcoin Cautious Despite Global Rise in Risk Appetite

Bitcoin is treading near local highs, remaining just below $67K. That’s a gain of 8.4% in seven days and a retest of the previous peak area in late April. Despite the burgeoning risk appetite in global markets, demand for Bitcoin, Ethereum and many altcoins is rather subdued. However, BTCUSD remains firmly above the 50-day moving average, indicating an upward trend.

Will UK Inflation Corroborate a June BoE Rate Cut?

However, just the day after the decision, data revealed that the UK economy rebounded more than expected in Q1, after slipping into recession during the second half of 2023, while the following week, the employment report pointed to hotter-than-expected wage growth in March, raising some concerns on whether inflation could hit the BoE’s 2% target any time soon.

Oil Shows Weakness

Oil is losing about 0.75% of its peak on Monday, having hit a strengthening sell-off as it attempts to climb above $80/bbl WTI and $84/bbl Brent.

PMIs in Focus This Week

Later this week, on Wednesday we look out for UK inflation and the cash rate decision from the Reserve Bank of New Zealand, who we expect will keep interest rate on 5.50%. On Wednesday as well we will have the FOMC minutes from last meeting. On Thursday we get PMIs from both the euro area, Japan and the US.

Number of Central Bank Speakers Increases

Eco releases remain second tier today, but the number of central bank speakers increases with especially Fed Waller discussing the US economy. Waller was one of the first and most prominent (rumoured candidate as next Fed chair) Fed-members to talk out in favour of keeping rates higher for longer.

Australian Dollar Shrugs After RBA Minutes

The Australian dollar edged lower but recovered in the Asian session. AUD/USD is showing little movement in the European session, trading at 0.6660.

Fed Rate Expectations Whipsawed by Fed Speakers and US CPI

The year started with the market firmly believing that the Fed would deliver six rate cuts during 2024 on the back of an aggressive slowdown in inflation, which has not materialized up to now. Developments elsewhere, in particular the numerous geopolitical events, have greatly affected market sentiment during 2024, but US inflation remains a dominant force of market movements, causing a rethinking of the Fed’s outlook every time there is a surprise in store.

NZD/USD Steady Ahead of RBNZ Rate Announcement

The New Zealand dollar is almost unchanged on Tuesday. NZD/USD is down 0.06%, trading at 0.6102 in the European session at the time of writing.

Canada: Inflation Cools Further in April

April was another month of good news on Canadian inflation. The BoC's preferred inflation gauges moved into the 1-3% target range for the first time in nearly three years. However, at 2.8% it is still close to the top of the BoC's range, and we expect the bank will want to see a bit more confirmation before taking rates lower and lean towards a July cut.