Today’s Notable Sentiment Shifts
USD – The dollar slipped from 4-1/2 month highs to trade little changed on Wednesday after minutes of last month’s Federal Reserve meeting suggested there was no consensus about the timing of a tapering of its asset purchases under the US central bank’s quantitative easing program.
After the release of the minutes, City Index noted that “the focus now shifts to next week’s Jackson Hole Symposium, where traders will closely scrutinize Fed Chairman Powell’s keynote speech for any hints about the timing of a taper announcement.”
NZD – At their August meeting, the RBNZ opted to keep rates unchanged, versus consensus for a 25 basis point rate hike in what was ultimately deemed as “hawkish hold”.
Reuters summarized the meeting, stating that “the central bank had been widely expected to become the first in the Asia-Pacific region to raise interest rates since the pandemic began but quickly shifted gears after the country was put into a snap lockdown over a handful of new cases.” While Westpac concluded that “this hawkish hold” outcome may be a headwind for NZ government bonds in the near term, but we’d expect markets to more fully price the tightening cycle if the Covid situation becomes less uncertain over the next few weeks.”
After the release of the minutes, City Index noted that “the focus now shifts to next week’s Jackson Hole Symposium, where traders will closely scrutinize Fed Chairman Powell’s keynote speech for any hints about the timing of a taper announcement.”
NZD – At their August meeting, the RBNZ opted to keep rates unchanged, versus consensus for a 25 basis point rate hike in what was ultimately deemed as “hawkish hold”.
Reuters summarized the meeting, stating that “the central bank had been widely expected to become the first in the Asia-Pacific region to raise interest rates since the pandemic began but quickly shifted gears after the country was put into a snap lockdown over a handful of new cases.” While Westpac concluded that “this hawkish hold” outcome may be a headwind for NZ government bonds in the near term, but we’d expect markets to more fully price the tightening cycle if the Covid situation becomes less uncertain over the next few weeks.”