NZD/USD hit by a toxic cocktail with risk themes

Down around 0.15%, NZD/USD is currently trading near 0.6690 and is moving between a low of 0.6670 and a high of 0.6709. Escalating tensions between Russia and Ukraine became the driving force as investors pounced on the Federal Reserve on Wednesday,

As a result, the S&P 500 went so far after a correction, its first. first since the 2020 crash in the world. market caused by the coronavirus pandemic. However, US stocks ended higher on Monday after reversing heavy losses early in a late rebound ahead of megacap tech earnings and this week’s Federal Reserve policy meeting. The Nasdaq Composite rose 0.6% to 13,855.13, turning green in a strong last-minute reversal. The S&P 500 gained 0.3% to 4,410.13 and the Dow Jones Industrial Average also gained 0.3% to 34,364.50.

Meanwhile, ‘data points to a slowdown in economic activity at the start of the year, amid broader inflation concerns’, said analysts at ANZ Bank.

This week, the Consumer Price Index will be the focus on this issue. “The 10% increase in oil prices from Q4 will make transportation a major contributor to equities with upside risk coming from housing, mainly due to spending,” TD Securities analysts explained commodity prices increased and consensus was faster,” explained TD Securities analysts. “A print close to 6%, a 3-decade high is unlikely to trigger a significant market reaction, but a print that matches the RBNZ forecast of 5.7% YoY would lead to a rally recover. ”

As for the US Central Bank, the market is bracing for the US Federal Reserve and the market is expecting the Fed to signal the removal of its broad stimulus program. “The risk with the meeting could be that the Fed gets even louder with its intention to adjust policy in response to inflation,” said analysts at ANZ Bank.