US CPIs Take Center Stage, RBNZ Takes the Central Bank Torch

WILL THE CPIS CEMENT THE CASE FOR DOUBLE HIKES BY THE FED?

The US dollar traded higher against most of the other major currencies on Monday and during the Asian session Tuesday. It underperformed only against CHF, while it was found virtually unchanged against GBP. The greenback gained the most versus CAD, AUD, and JPY, in that order.

NASDAQ 100 — TECHNICAL OUTLOOK

The Nasdaq 100 cash index continued drifting south yesterday, breaking below the 14185 barrier marked by the low of March 21st. Overall, the index has been in a short-term downtrend after it reversed south by completing a failure swing top on April 6th. The short-term downtrend is marked by a downside line taken from the peak of April 5th.

WILL THE RBNZ HIKE BY 25 OR 50BPS?

Tonight, during the Asian session Wednesday, we have a central bank deciding on its own interest rates and this is the RBNZ. When they last met, officials of this Bank decided to push the hike button for the third straight meeting, lifting interest rates by another 25bps, to 1%. The Bank also steepened its rate-path projections, with officials projecting that the OCR will hit 3.35% by the end of 2024, instead 2.6% predicted in November. For the end of this year, they see the rate being lifted to 2.5%, a quarter-point higher from 2.25% seen in November.

NZD/USD — TECHNICAL OUTLOOK

NZD/USD traded in a consolidative manner yesterday and today in Asia, after breaking below the upside support line drawn from the low of January 28th. With that in mind, we will abandon the bullish case for now, and turn neutral. We will start examining the completion of a bearish reversal upon a dip below 0.6795, a support marked by the low of March 9th.

AS FOR THE REST OF TODAY’S EVENTS

During the early EU session, we already got the UK employment report for February. The unemployment rate ticked down to 3.8% from 3.9%, while the net change in employment showed that the economy has gained 10k jobs after losing 12k in January. The forecast was for a 50k gain.

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