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On August 13th, sources close to the European Commission president stated that Ukraines allies are evaluating a gradual easing of sanctions against Russia if a comprehensive ceasefire agreement is reached. The source added that sanctions would be reimposed in the event of a violation of the agreement. They hope to immediately reach a 15-day ceasefire (during which sanctions would remain in effect) before a more organized pause in the conflict in Ukraine can be achieved. Separately, Italian government sources stated that they will push Trump to include Europe in his discussions on Ukraine during his video call with Putin later today. An Italian diplomat explained, "He has been asking European countries to increase military spending, so we must be involved in these decisions." The source added that during the call, Italy will emphasize the need for clear military, economic, and political guarantees for Ukraine.AMD (AMD.O) shares rose 3% in pre-market trading in the U.S.Poland signs $3.8 billion deal to boost F-16 fleet capabilities.On August 13, CNBC reported that two unnamed government officials revealed that the Trump administration is considering 11 candidates to succeed Federal Reserve Chairman Jerome Powell when his term expires next May, including three previously unnamed names. These new members include Jefferies Chief Market Strategist David Zervos, former Federal Reserve Governor Larry Lindsey, and BlackRocks Chief Investment Officer of Global Fixed Income Rick Rieder. They join the eight candidates previously confirmed by CNBC: Federal Reserve Vice Chairman for Supervision Bowman, Federal Reserve Governor Waller, and Federal Reserve Vice Chairman Jefferson. Officials also confirmed that the list also includes Mark Summerlin, a former economic adviser in the Bush administration; Dallas Fed President Logan; and former St. Louis Fed President Bullard. Officials described a "deliberative process" in which Treasury Secretary Bessant will meet with all candidates, whittle down the list, and present the final list to the president for a decision. The size of the list and the process described suggest a decision is not imminent and could take considerable time. However, officials declined to provide a timeline.On August 13th, U.S. Treasury Secretary Benson said in an interview that the Federal Reserves interest rate should be 150-175 basis points lower than it is now, and that if the data were accurate, the Fed could have cut rates earlier. Bessant believes a 50 basis point rate cut is possible, with a series of cuts likely starting in September. Regarding the selection of the Fed chair, he mentioned that they will cast a wide net, encompassing 10-11 people. He also stated that he had proposed establishing a "shadow Fed chair" but now believes it is unnecessary. Furthermore, Bessant believes the Fed does not need to resume large-scale asset purchases (QE). Regarding the jobs report, he expressed opposition to halting its release, but emphasized the need for reliable data. Some analysts say the probability of a 50 basis point rate cut by the Fed in September is now almost zero. For this to happen, another weak non-farm payroll report would likely be needed in September.

NZDUSD consolidates near 0.6100, closing below Friday's two-month peak

Alina Haynes

Nov 14, 2022 18:54

截屏2022-11-14 下午5.32.48.png 


The NZDUSD pair struggles to capitalize on last week's breakthrough momentum through the 100-day Simple Moving Average, bouncing between moderate gains and slight losses throughout Monday's early European session. The pair is currently trading slightly below the 0.6100 level, practically flat on the day, and remains close to Friday's two-month high.

 

A convergence of variables permits the US Dollar to stabilize at its lowest level since mid-August, acting as a headwind for the NZDUSD pair. In response to Christopher Waller's more hawkish remarks on Sunday, U.S. Treasury bond yields rise. It is expected that this, along with a softer tone on equity markets, will benefit the safe-haven dollar and exert some downward pressure on the risk-averse New Zealand dollar.

 

Waller indicated during a conversation in Sydney, Australia, that the markets had overreacted to October's weaker-than-expected consumer price inflation numbers. Waller stated that the Federal Reserve was not lessening its fight against inflation and that a string of moderate CPI readings would be required for the US central bank to soften its approach. This increases US Treasury bond yields and helps support USD demand, notwithstanding the lack of confidence in the intraday rise.

 

A greater possibility that the Federal Reserve will slow the pace of its policy tightening discourages USD bulls from placing risky trades. Moreover, optimism surrounding a likely rollback of COVID-19 measures in China supports the NZD/USD pair and restricts its downside. Therefore, the subdued intraday price movement can be characterized as a bullish consolidation phase, meaning that any significant pullback is likely to be purchased and remain confined.

 

The United States is not slated to provide any market-moving economic data on Monday, leaving the USD at the mercy of US bond yields. Traders will also consider Lael Brainard's anticipated Fed governor address. Together with the broader risk sentiment, this will be analyzed for short-term trading opportunities in the NZDUSD pair prior to the release of Chinese economic data on Tuesday.

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