RBNZ’s interest rate decision in sight

The RBNZ interest rate decision is due to take place in tomorrow’s Asian session. NZD OIS currently implies a 98% probability for the bank to remain on hold at 5.50%, thus we turn our attention to the banks accompanying statement which is due to be released after the interest rate decision. Should the bank’s accompanying statement appear predominantly hawkish in nature, i.e implying that interest rates may remain at their current restrictive levels for a prolonged period of time it could provide support for the NZD and vice versa. Over in the US, Minneapolis Fed President Kashkari earlier on today re-iterated that the bank can’t stop short in the fight against inflation, implying that the bank should reach its 2% inflation target. On the other hand, Chicago Fed President Goolsbee in a speech yesterday, stated according to some media outlets, his concerns about maintaining interest rates higher for longer, as a potential risk to a scenario in which unemployment may rise. Thus, the two comments may have been perceived as hawkish and dovish respectively, thus capping the potential market impact on the dollar, from the two policymakers. In the Equities market, TSMC has announced a $6.6b in proposed CHIPS Act Direct Funding in corporation with the US Department of Commerce, in order to speed up semiconductor process technology in the US. Should more companies such as Intel (#INTC) proceed with similar agreements it could aid the company’s stock price. Tensions in the Middle East appear to be the epicentre of attention. In particular, Israel and Hamas appear to be attempting to break ground for a ceasefire talk using Egypt as mediators.

On a technical level, US100 appears to be moving in a sideways fashion, having broken below our upwards moving channel which was incepted on the 31 of January. We maintain a sideways bias for the index and supporting our case is the aforementioned breaking of our upwards moving channel, in addition to the RSI indicator below our chart which currently registers a figure near 50, implying a neutral market sentiment. For our sideways bias to continue, we would require the index to remain within the sideways channel formed by the 17800 (S1) support level and the 18500 (R1) resistance ceiling. On the other hand, for a bearish outlook, we would require a clear break below the 17800 (S1) support level, with the next possible target for the bears being the 17160 (S2) support level. Lastly, for a bullish outlook we would require a clear break above the 18500 (R1) resistance line with the next possible target for the bulls being the 19100 (R2) resistance line.

EUR/USD appears to be moving in a sideways fashion, having failed to break above the 1.0865 (R1) resistance line. We maintain a sideways bias for the pair and supporting our case is the narrowing of the Bollinger bands which imply low market volatility. For our sideways bias to continue, we would require the pair to remain confined between the 1.0805 (S1) support level and the 1.0865 (R1) resistance line. On the other hand, for a bullish outlook, we would require a clear break above the 1.0865 (R1) resistance line with the next possible target for the bulls being the 1.0955 (R2) resistance line. Lastly, for a bearish outlook we would require a clear beak below the 1.0805 (S1) support level with the next possible target for the bears being the 1.0695 (S2) support level.

今日其他亮点:

In an easy Tuesday we note in the European session the release of France’s current account balance for February and the Czech Republic’s unemployment rate for March. Later in the American session we note that SNB Vice Chari Schlegel speaks, while oil traders may be more interested in the release of the US weekly API crude oil inventories figure. During the Asian session we note the release of Japan’s Corporate goods price growth rate for March while just before Wednesday’s European session is about to begin BoJ Governor Kazuo Ueda is scheduled to speak.