Reserve Bank Of New Zealand (RBNZ) Hiked Its Interest Rates, USD Gains On Rising Hawkish Fed Bets
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US stocks now join the treasury selloff, and the US dollar pushes higher on the back of the increasingly hawkish Federal Reserve (Fed) bets.
The preliminary PMI in the US came in better than expected for February, and the services PMI ticked above the 50 mark, into the expansion zone, for the first time since last July.
Walmart and Home Depot
The strong economic data further fueled the Fed hawks. But this time, the stocks sold off as well, despite the strong economic data. The weak outlook from Walmart and Home Depot left the no-landing bets under the dark shadow of higher US yields.
The S&P500 dived 2% on Tuesday, below the minor 23.6% Fibonacci retracement on the latest October to February rally, and below the 4000 psychological mark.
Fed
Today, the FOMC minutes will be closely watched. We know that the Fed officials will sound concerned with the strong jobs market and will point at the resilience of the economy to continue hiking the rates. That could further weigh on equity appetite.
Fed hawks are supportive of the US dollar, however.
Reserve Bank of New Zealand
Elsewhere, the Reserve Bank of New Zealand (RBNZ) hiked its interest rates by 50bp today, after a three-month break and Nvidia will be reporting Q4 earnings after the bell. Nvidia results may look ugly, but long-term investors could look beyond the potentially ugly results:
Here is why: https://medium.com/@swissquote.education
Watch the full episode to find out more!
- 0:00 Intro
- 0:36 US equities join the treasury selloff
- 1:46 Walmart, Home Depot beat, but warn of weaker outlook
- 4:55 USD gains on rising hawkish Fed bets
- 6:37 RBNZ hikes by 50bp
- 7:32 FOMC minutes to further weigh on sentiment
- 8:02 Should you look past potentially ugly Nvidia earnings?
Ipek Ozkardeskaya
Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020.
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