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On June 19, Minister of Commerce Wang Wentao met with Canadian Minister of Industry Jolly, Prime Ministers Secretary to Parliament Blois, and representatives from the business community in Beijing on June 18. The two sides exchanged in-depth views on China-Canada economic and trade relations, the development of Canadian-invested enterprises in China, and key economic and trade concerns. Wang Wentao stated that both sides should fully leverage the China-Canada Joint Economic and Trade Commission mechanism as the main channel for economic and trade cooperation, consolidate the momentum of cooperation in traditional industries, vigorously expand cooperation in emerging and future industries, and strengthen the bonds of common interests. China has always valued the opinions of foreign investors and is willing to work with Canada to extend the list of cooperation and shorten the list of issues through candid dialogue and pragmatic cooperation, thereby promoting the healthy, stable, and sustainable development of China-Canada economic and trade relations.Market news: Early users of Anthropic Mythos retain access despite the U.S. governments restrictions.Abu Dhabi National Oil Company: Crude oil can be supplied through loading schedules starting April 27.June 19th - Investinglive analyst Eamonn Sheridan stated that market movements, including those of oil and the US dollar, shifted due to the cancellation of Vances trip, revealing previous market expectations: the early setbacks caused by Israel have led the market to reassess the process. The 60-day countdown to the nuclear negotiations following the Memorandum of Understanding has begun, but the first meeting is still unscheduled, a worrying situation for a process that cannot tolerate procedural delays. If the Geneva talks fail to convene in time, the risk premium flowing out of crude oil after the reopening of the Strait of Hormuz will face partial reconstruction. The current situation is clear: neither side will travel to Switzerland—at least not yet—and the significant differences in their respective reasons indicate that the root of the friction goes far beyond the logistical issues mentioned by the White House.June 19th - Data shows that foreign exchange traders, including hedge funds, are buying options in large quantities, betting on a further strengthening of the US dollar following hawkish signals from the Federal Reserve this week, which reinforced expectations of a US interest rate hike. According to traders, leveraged funds began buying dollar call options on Wednesday, with these options appreciating in value if the dollar strengthens. This demand continued into Thursday as investors digested new Federal Reserve Chairman Warshs anti-inflationary remarks. Tobias Jungmann, head of FX options for the Americas at Bank of America, said, "Were seeing massive buying of dollar call options, primarily in G-10 currencies. Given the current low implied volatility, establishing long dollar positions through options looks very attractive." James Swindell, senior FX options trader at Barclays in London, said, "Were seeing significant demand across the board for dollar call options, particularly in EUR/USD and GBP/USD."

NZD/USD falls toward 0.6100 as Vice President Joe Biden aims to raise taxes on the rich and China's CPI is in focus

Daniel Rogers

Mar 09, 2023 14:01

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The NZD/USD pair was unable to recapture the crucial resistance level of 0.6120 during the Asian session. The New Zealand dollar is falling toward the round-number support of 0.6100 as the news that US President Joe Biden has proposed increasing the corporate tax rate from 21% to 28% has bolstered bearish market sentiment.

 

US Vice President Joseph Biden proposes a 25% tax on billionaires and steep levies on affluent investors. He has also proposed a 39.6% tax on incomes over $400,000 in the budget. The United States' fiscal policy appears to be kicking in to prevent the Consumer Price Index (CPI) from flexing its muscles further. By diminishing market liquidity, higher taxes may have a significant effect on consumer spending.

 

As a consequence of the news that wealthy Americans will be taxed more heavily, the S&P 500 futures are also under duress. The futures for the 500 largest U.S. stocks are falling during the Asian session. It appears that market participants will use Wednesday's insignificant recovery move as a selling opportunity.

 

In response to Vice President Biden's proposal for higher tariffs, the US Dollar Index (DXY) may experience some upward movement. The USD Index is presently hovering above 105.20 and is anticipated to resume its upward trend.

 

This week, the US Nonfarm Payrolls (NFP) data will remain in the spotlight. According to the consensus, the US economy added 203K new employment in February, which is less than the previous record-breaking release of 517K. The unemployment rate is anticipated to remain unchanged at 3.4%. Investors are concerned about the Average Hourly Earnings data, which is expected to increase to 4.8% on an annual basis from the previous release of 4.4%. An increase in the labor cost index will increase the likelihood of the Federal Reserve raising interest rates more significantly (Fed).

 

Investors are keeping an eye on China's Consumer Price Index (CPI) data. China's CPI is anticipated to decrease to 1.9% from the previous annual rate of 2.1%. The monthly CPI is expected to decrease to 0.2% from the previous release of 0.8%. If inflation declines, the Chinese government and the People's Bank of China (PBOC) may be forced to infuse more liquidity into the economy.

 

Notably, New Zealand is one of China's primary trading partners, and an increase in liquidity in the Chinese economy will increase demand for the New Zealand Dollar.


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