US equity markets struggled to find direction overnight. Stocks edged higher early in the session, but ultimately closed modestly lower in a choppy session.
Softer economic data weighed on U.S. equities as signs of a slowing economic recovery and rising inflation gave investors pause as they consider the outlook of the post-pandemic global market recovery.
Overnight comments from Federal Reserve members saw Treasury yields decline as they repeated recent comments that they believed that price pressures would largely be “transitory”. The US Dollar Index traded at its lowest level since early January as the yield on 10-year Treasuries declined four basis points to 1.56%.
Today the only major announcement is the Royal Bank of New Zealand’s Monetary policy statement and rate decision.
While the RBNZ is expected to leave all policy settings unchanged, along with the Bank of Canada (who tapered asset purchases last month), the RBNZ is seen as another central bank that could reduce stimulus this year as strong economic figures continue to point to a rapid recovery.
FX traders will be watching the accompanying statement and economic projections (which are likely to be upgraded) for any clues on when the RBNZ plans to start winding back its QE program, a hawkish statement will likely see NZD push higher, and to a lesser extent the AUD. The Commitment of Traders positioning on NZD/USD is showing institutional traders predicting a more hawkish than expected outcome.
Thursday, 27 May 2021 – Indicative Index Dividends
Dividends are in Points
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