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On June 24, the Bank of Korea reiterated its hawkish stance, stating that rising housing prices, expanding household debt, and increased leveraged investment could exacerbate financial imbalances, necessitating further interest rate hikes at an appropriate time. The Bank of Koreas semi-annual Financial Stability Report, released Wednesday, noted that despite increased domestic and international uncertainties, the South Korean financial system remained generally stable thanks to strong economic growth, resilient financial institutions, and sound external payments. However, the report warned that the risk of financial imbalances could further increase as housing prices in Seoul and surrounding areas accelerate and investors become increasingly reliant on leveraged asset purchases. Furthermore, while banks and other financial institutions maintain capital and liquidity buffers, credit risks for vulnerable borrowers and businesses continue to rise. The report stated, "The Bank of Korea will maintain the benchmark interest rate at 2.5% from the second half of 2025, but considering inflationary pressures, economic conditions, and financial stability risks, it believes it is necessary to raise the policy rate at an appropriate time."ASE (ASE): Many customers are following Nvidia (NVDA.O) and AMD (AMD.O) in expanding their investments in Taiwan.On June 24th, according to The Hill, "U.S. Treasury Secretary Scott Bessant called Commerce Secretary Howard Lutnik an idiot to his face during a dispute over a Ukrainian mineral deal." The report noted that the conflict stemmed from preparations for the rare earth metals deal with Ukraine. Lutnik accused Bessant of "sabotaging" the agreement, while Bessant called Lutniks proposal a "shit deal" and called him an "idiot" to his face. On April 30, 2025, the United States and Ukraine signed an agreement on Ukraines natural resources. Under the agreement, the United States has the right of first refusal to purchase minerals mined in Ukraine. The agreement stipulates the establishment of an investment fund in Ukraine, with both parties sharing management and funding responsibilities equally (50% each).Futures News, June 24th - According to foreign media reports, data released by the Petroleum Institute of Japan (PAJ) on Wednesday showed that as of the week ending June 20th, Japans commercial crude oil inventories were 9,757,338 kiloliters, an increase of 33,755 kiloliters from the previous weeks 9,723,583 kiloliters. Refinery operational capacity utilization was 80.3%, compared to 81.9% the previous week. Refinery design capacity utilization was 70.5%, unchanged from the previous week. Due to changes in Japans petroleum product supply structure, the Petroleum Institute of Japan has suspended the release of weekly inventory details for gasoline, jet fuel, kerosene, and diesel.On June 24th, SoftBank Group Chairman Masayoshi Son stated at the shareholders meeting that Arm (ARM.O), SoftBanks UK-based chip design company, will evolve from a chip designer to a chip provider, and will be directly involved in manufacturing. He predicted that "the future AI era will be CPU-centric," and emphasized that Arm "still has more than 10 times the growth potential." He also mentioned SoftBanks approximately 300 billion yen investment in Intel, saying that "it was initially met with criticism," but currently "its profits, calculated by market capitalization, have reached trillions of yen."

NZD/USD Remains Under Pressure Around 0.6250 Amid Good Friday Holiday, With US NFP Data In Focus

Alina Haynes

Apr 07, 2023 11:47

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During the inactive Asian session on Good Friday, the NZD/USD maintains losses near 0.6245-40. The New Zealand traders take a breather after the price dropped the most in a month the day before. In addition to the lack of liquidity induced by the holidays, the cautious tone preceding the March US employment data also impedes the immediate movement of the quote.

 

The recent decline in price may be attributed to the market's pessimism regarding the health of the world's largest economy, the United States, as well as fears of contagion. Notably, the Fed's diminishing hawkish bets prevent the US Dollar from bolstering the risk-averse sentiment.

 

Nonetheless, fears of a recession increased after US Initial Jobless Claims improved to 228K for the week ending March 31, compared to the expected 200K and the upwardly revised 246K from the previous week. Notable is the increase in Challenger Job Cuts from 77,77K to 89,703K in the given month.

 

Since the outset, US data have been negative, especially in terms of employment and economic activity, fueling fears of a decline. Previously, US JOLTS Job Openings dropped to a 19-month low in February, and March's ADP Employment Change figures of 145K were also disappointing to markets. In addition, the US ISM Services PMI for March decreased to 51.2 from 54.5 previously and 55.1 expected.

 

In addition to US data, the Federal Reserve's (Fed) preferred economic indicator specifies recession concerns, which impact the NZD/USD exchange rate. The 'near-term forward spread,' which compares the forward rate on Treasury bills 18 months from now to the current yield on three-month Treasury bills, is the most reliable bond market indicator of an impending economic contraction, according to Fed research.

 

Domestically, the Reserve Bank of New Zealand (RBNZ) defies the prevailing trend of suspending rate hikes and rather surprises the markets by increasing the benchmark rate by 0.50 percentage points. In response to the aforementioned negative catalysts, traders became more skeptical of the NZD/USD pair's prior rally and subsequently inundated the pair with additional strength.

 

Benchmarks on Wall Street are nursing their wounds, while 10-year and 2-year US Treasury bond yields remain under pressure despite recent consolidation around 3.30 percent and 3.83 percent, respectively. Despite this, S&P 500 Futures experience modest losses amidst inactive markets.

 

Given the pause in market activity caused by the holidays, today's US employment report may cause wild market fluctuations, especially in light of recent recession fears and dismal US data. The market expects the primary Nonfarm Payrolls (NFP) number to be 240K, down from 311K previously, and the unemployment rate to remain unchanged at 3.6%.


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