Asian equities experienced a slight decline for the second consecutive day as talks on raising the US debt ceiling reached an impasse, negatively affecting risk sentiment. The Chinese CHNComp and HKComp declined by 0.3%, while the Japanese Nikkei225 rejected record levels and fell by 0.28% to 30,780 points. The KOSP200 traded sideways with a modest change of 0.09%, and the AUS200 was down by 0.14%.
Yesterday's session on Wall Street ended with declines, and it is likely that this sentiment will continue today as US leaders failed to reach a conclusion in debt ceiling negotiations.
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Create account Try a demo Download mobile app Download mobile appThe negative performance in Asian markets and the previous close on Wall Street may impact risk sentiment during the European session. Currently, futures indicate a slightly higher opening for the German DAX and EURO STOXX 50 Index.
The Bank of New Zealand after today’s Monetary Policy Statement and OCR decision. The Official Cash Rate was raised by 0.25% to 5.50% - in line with estimates. However, the NZ Central Bank suggested the end of the tightening cycle and potential reduction could start in late 2024.
As a result bond yields in New Zealand declined and the currency depreciated. The NZDUSD pair dropped over 1.3%.
RBNZ's Governor Adrian Orr said that he foreshadows the country's monetary policy will remain tight for some time and wants to see deposit rates rise further. He also said that the newest data is finally satisfactory after a long battle.
After the RBNZ Minutes the committee was satisfied with the OCR's project forward path and expects inflation to return to its target range of 1-3% by Q3 of 2024.
The UK inflation data will be closely watched, with expectations of a decline in headline annual inflation in April. Core annual inflation is expected to remain high, putting pressure on the Bank of England
Gold and silver prices rebounded modestly by approximately 0.2%.
Cryptocurrencies are experiencing a setback after yesterday's rise, and BTC has returned to the range of 26.8k. BTC and ETH decline 1.6%.
The NZDUSD pair dropped sharply after RBNZ minutes in reaction to the end of the tightening cycle. Currently, the pair is down 1.33% to 0.6164 approaching its 200-day moving average on D1 chart.
