News and analysis

With asset managers and large speculators trimming long and short exposure to yen futures, their appetite to speculate on the currency appears to be waning after BOJ interventions.

The latest NAB Business survey revealed a big slowdown in hiring in April, with new orders also declining at the fastest pace in several years. Importantly, the weakness coincided with a noticeable deceleration in up and downstream price pressures.

While that keeps the prospect of a near-term rate cut from the Reserve Bank of New Zealand on the table should inflationary pressures suddenly subside, for now, movements in NZD/USD continue to be dictated by sentiment on what the Federal Reserve may do with US interest rates in the months ahead.

The prospects of a weaker US dollar are growing which brings a potential breakout on the cards for AUD/USD, although it has some tough levels to crack first.

Japan’s Nikki 225 and Hong Kong’s Hang Seng have been like chalk and cheese coming out of the pandemic. As one surged, the other floundered. But the tide looks to be turning, and fast.

GBP/USD slipped last week on a moderately dovish BOE – what should traders be watching this week?

Investors will be looking forward to the release of Consumer Price Index (CPI) on Wednesday, which is going to be the next big catalyst for the dollar and markets in general. The USD/JPY outlook could change dramatically should Japan intervene again.

The health of the consumer will be in focus next week, with US inflation data, retail sales, and the start of retailers' earnings. Walmart and Home Deport will update the market. Meanwhile, Chinese e-commerce and cloud giant Alibaba will also release earnings, along with Chinese retail sales figures later in the week,

US stocks extended gains from yesterday and are on track for a weekly rise as rate cut hopes dominate. Weaker-than-expected jobless claims after Friday's softer non-farm payroll data have boosted hopes that the Fed could cut rates in September. Meanwhile, upbeat earnings season has also helped the mood. Oil prices are set for a weekly rise as the demand outlook improves.