Morning wrap (25.05.2022)

• US indices finished yesterday's trading lower. S&P 500 dropped 0.81%, Nasdaq slumped 2.35% lower and Russell 2000 moved 1.56% lower. Dow Jones was an exception as it gained 0.15%

• In spite of a poor Wall Street session, indices from Asia-Pacific are traded higher today. S&P/ASX 200 and Kospi gained 0.6% while indices from China traded up to 0.7% higher. Nikkei dropped 0.2%

• DAX futures point to a higher opening of the European cash session

• The Reserve Bank of New Zealand delivered a 50 basis point rate hike, in-line with expectations, pushing the official cash rate to 2.00%. This is fifth rate hike in a row and second straight 50 basis point rate hike

• RBNZ Governor Orr said that the central bank stays committed to bring inflation under control and hinted that rates may increase beyond neutral levels. NZDUSD gained and reached 3-week high near 0.6500

• South Korea and the United States conducted military drills today after North Korea fired 3 ballistic missiles into Sea of Japan

• Australian construction work done dropped 0.9% QoQ in Q1 2022 (exp. +1.0% QoQ)

• API report pointed to a 0.57 million barrel build in US oil inventories (exp. -0.6 mb)

• Cryptocurrencies traded mixed on Wednesday but major coins gained. Bitcoin gains 1.3%, Ethereum trades 0.6% higher

• Brent and WTI trade 0.5-0.6% higher

• Precious metals pull back slightly. Palladium is an exception and gains 0.7%

• NZD and GBP are the best performing major currencies while CHF and EUR lag the most

NZDUSD tested 0.6500 mark following a 50 bp rate hike from RBNZ. The pair reached a 3-week high but bulls struggle to hold onto those gains. Source: xStation5