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May 20 (AP) -- The U.S. Senate on Tuesday advanced a bill aimed at forcing President Trump to withdraw troops from the war with Iran. Since Trump ordered the attack on Iran in late February, Democrats have repeatedly pushed for a war powers resolution, demanding that Trump either obtain congressional approval to continue the war or withdraw troops. Republicans had previously been able to gather enough votes to reject these proposals, but Louisiana Senator Bill Cassidy (whom Trump supported in the recent primaries) cast the crucial vote, allowing the bill to move forward.On May 20th, European Central Bank (ECB) Governing Council member Jean-Henri Kocher stated that a June interest rate hike is inevitable if the Strait of Hormuz remains closed, warning that a protracted conflict would significantly push up Eurozone inflation. In a media interview, the Austrian central bank governor stated that the ECBs mandate is clear: if policymakers conclude that the 2% inflation target is unattainable, then interest rates must be raised. No one can predict full-year inflation, as the outcome depends entirely on how long the conflict lasts and how long the Strait of Hormuz remains closed to shipping. Despite weak data, Kocher stated that the Austrian economy performed relatively robustly in the first quarter, and that 0.5% growth for the year is still achievable if the Iranian conflict does not prove protracted. Kocher cautiously noted that with three weeks until the June 11th meeting, the situation could still change before any decisions are made.① Iran 1. Iranian lawmaker: Iran has never initiated a war, nor has it ever left the negotiating table. 2. Iranian military spokesperson: If attacked again, it will "open a new front." 3. Iranian Deputy Foreign Minister: Iran is prepared to respond to any military aggression. The US is whitewashing "threats" as "peace opportunities." 4. Explosions were heard on Qeshm Island, Iran. Iranian officials: The explosions were caused by the disposal of unexploded ordnance. 5. Iranian Ministry of Justice: Assets of 52 individuals linked to hostile networks have been seized, and the proceeds will be used for the people. ② United States 1. The US Treasury Department issued a new round of sanctions against Iran. 2. US officials: Many of Irans ballistic missiles are deployed in underground caves and other facilities carved into granite mountains, making them difficult for US attack aircraft to destroy. 3. US officials: The White House National Security Council meeting on Tuesday was postponed after Trump delayed the strike on Iran. 4. Trump: We may have to strike Iran again, its not certain yet. I agree to give Iran another 2-3 days, maybe until Friday or Saturday, maybe early next week, time is limited. ③ Israel 1. Israel Defense Forces: In the past 24 hours, more than 25 Hezbollah infrastructure targets were struck in multiple areas of southern Lebanon. 2. Israeli senior officials assess that the US still favors resuming military action against Iran. ④ Strait of Hormuz 1. Qatari Foreign Ministry: Any change to the status quo on the issue of freedom of navigation in the Strait of Hormuz is unacceptable. 2. G7 Finance Ministers Statement: Reopening the Strait of Hormuz is imperative. Continued commitment to maintaining energy market stability. 3. US Central Command: Has forced 89 merchant ships to change course. 4. NATO sets a deadline: If the Strait of Hormuz is not open by early July, it plans to deploy troops to escort ships. ⑤ Ceasefire Negotiations 1. Iranian Deputy Foreign Minister releases Irans draft proposal for an agreement with the US, including the withdrawal of US troops from surrounding areas. 2. Mediators believe that the US-Iran negotiations have made almost no progress, and Iran insists on its core demands. 3. US Vice President Vance: The US-Iran negotiations have made great progress, but the US has also prepared a "Plan B". ⑥ Other Circumstances: 1. The Trump administration plans to reduce NATOs crisis response force, demanding that Europe take over security leadership. 2. British Airways suspends flights to Israel until August 1st. 3. Hamas: We reject the Peace Commission report, which contains erroneous statements exonerating the occupying government. 4. Lebanese official sources indicate that a draft of a US-mediated declaration of intent with Israel is under review, but has not yet been finalized. 5. UAE Ministry of Defense: Six drones launched from Iraq were detected and dealt with in the past 48 hours. All targets were successfully intercepted, with no casualties and no impact on the security of critical facilities. International Atomic Energy Agency Director General Grossi: (Regarding the Barakah nuclear power plant in the UAE) Radiation levels are normal and external power has been restored, but the situation is seriously worrying.Chevron (CVX.N) and Saudi Aramcos Motiva have restricted the delivery of key engine oil feedstocks.

Despite a stable DXY and a hawkish RBNZ stance, NZD/USD bulls tinker around 0.5700

Daniel Rogers

Oct 19, 2022 15:48

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On Wednesday morning, NZD/USD bulls struggle to keep control during the three-day uptrend, making minor gains above 0.5700. The market's sluggish performance in light of the dormant US Dollar Index (DXY) and the risk-on stance is reflected in this. However, buyers remain upbeat due to the hawkish view for the Reserve Bank of New Zealand's (RBNZ) upcoming action.

 

Following the announcement of New Zealand's (NZ) Q3 Consumer Price Index, several banks increased their favorable forecasts for the RBNZ's upcoming action (CPI).

 

However, against the market's expectation of 1.6% and the prior data of 1.6%, New Zealand's Q3 CPI jumped to 2.2%. The data also showed that the YoY CPI increased to 7.2% from 7.2% earlier and 6.6% as was predicted. The Australia and New Zealand Banking Group (ANZ) said, based on the information: "The RBNZ will need to take action as core inflation continues to remain entrenched and shows no signs of turning the corner. We expect the OCR to rise by 75 basis points to 5% in November and February."

 

The risk-on attitude is also helping the NZD/ascent elsewhere. In keeping with Wall Street's second straight day of gains, USD's S&P 500 Futures rise 0.80% intraday, while the US Dollar Index (DXY) holds steady near 112.00 and US 10-year Treasury yields fluctuate around the 4.00% level.

 

News reports about the battle of Russian forces in Ukraine and UK Chancellor Jeremy Hunt's ability to fend off the impacts of the recession appear to be the main drivers of the recent market optimism.

 

It should be noted that despite risk-on attitude and sluggish Treasury rates, the DXY does not increase in response to improved industrial production and aggressive Fed statements. Neel Kashkari, president of the Minneapolis Federal Reserve Bank, recently said: "Until I see persuasive evidence that core inflation has at least peaked, I am not willing to pause rate hikes."

 

Future Fed speakers will join housing-related secondary US data to thrill NZD/USD speculators. However, barring any risk-averse surprises or unexpected RBNZ pronouncements, the Kiwi-Dollar pair is likely to continue strengthening.

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