Market Update 04/06/2024

Welcome to our daily market update, where we help keep you informed on the latest happenings in the world of FX.
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On Friday night, the US April PCE (Personal Consumption Expenditures) deflator showed prices increased by 0.2% vs 0.3% forecasted, the slowest rate this year. The Fed would have been pleased with this preferred measure, and the market saw it as a sign that Fed cuts might be closer. Overnight, trading in several NYSE stocks was briefly halted due to a technical glitch and US equities generally declined as the night progressed. The yield on the US 10-year dropped 11bps to 4.39% following a weaker manufacturing data. The softer than expected US data and the resulting fall in yields have weakened the USD, benefiting the NZD. Markets are gearing up for next week’s Fed meeting, however, this week’s FX movements are likely to remain heavily influenced by USD and global events, with key data such as US ISM services, Non-Farm Payrolls, and the ECB meeting (where a cut is expected) on Thursday night NZT.
 
NZDUSD has gained from ongoing positive market sentiment, driven by confidence in the US economy and expectation of potential rate cuts. The RBNZ’s firm stance supports the NZD, even as seasonal boosts from meat & timber production decline. The NZD might test 0.6200 this week, having risen from just above 0.6100 on Friday to 0.6167. Current support level now sits at 0.6150 & 0.6115.
 
NZDAUD has similar trend, with the RBA expected to make a first move. The pair has surpassed the 200-day moving average at 0.9250, and it might target 0.9300.
 
USDJPY dropped from 157.75 to 156.15, marking its lowest point in a week. Data from Japan’s Finance ministry showed they’ve spent a record $62.2 billion in the last month to support the yen. This surpasses the total amount spent in 2022 to support the currency and exceeds the past projections.
 
No local data is scheduled for release today, but we’re gearing up for some significant announcements later this week. Tomorrow, we’ll be closely watching the Terms of Trade for Q1 and on Thursday, the ANZ Commodity Prices. Additionally, Australia’s GDP data is expected on Wednesday. Looking across the Pacific, tonight we’ll be eyeing the JOLTS (Job Openings and Labor Turnover Survey) and Factory Orders data from the US. And as usual, we’ll be eagerly awaiting the Non-Farm Payrolls report on Friday night.
On Friday night, the US April PCE (Personal Consumption Expenditures) deflator showed prices increased by 0.2% vs 0.3% forecasted, the slowest rate this year. The Fed would have been pleased with this preferred measure, and the market saw it as a sign that Fed cuts might be closer. Overnight, trading in several NYSE stocks was briefly halted due to a technical glitch and US equities generally declined as the night progressed. The yield on the US 10-year dropped 11bps to 4.39% following a weaker manufacturing data. The softer than expected US data and the resulting fall in yields have weakened the USD, benefiting the NZD. Markets are gearing up for next week’s Fed meeting, however, this week’s FX movements are likely to remain heavily influenced by USD and global events, with key data such as US ISM services, Non-Farm Payrolls, and the ECB meeting (where a cut is expected) on Thursday night NZT.
 
NZDUSD has gained from ongoing positive market sentiment, driven by confidence in the US economy and expectation of potential rate cuts. The RBNZ’s firm stance supports the NZD, even as seasonal boosts from meat & timber production decline. The NZD might test 0.6200 this week, having risen from just above 0.6100 on Friday to 0.6167. Current support level now sits at 0.6150 & 0.6115.
 
NZDAUD has similar trend, with the RBA expected to make a first move. The pair has surpassed the 200-day moving average at 0.9250, and it might target 0.9300.
 
USDJPY dropped from 157.75 to 156.15, marking its lowest point in a week. Data from Japan’s Finance ministry showed they’ve spent a record $62.2 billion in the last month to support the yen. This surpasses the total amount spent in 2022 to support the currency and exceeds the past projections.
 
No local data is scheduled for release today, but we’re gearing up for some significant announcements later this week. Tomorrow, we’ll be closely watching the Terms of Trade for Q1 and on Thursday, the ANZ Commodity Prices. Additionally, Australia’s GDP data is expected on Wednesday. Looking across the Pacific, tonight we’ll be eyeing the JOLTS (Job Openings and Labor Turnover Survey) and Factory Orders data from the US. And as usual, we’ll be eagerly awaiting the Non-Farm Payrolls report on Friday night.


 Here are the latest mid-market rates:

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