A very quiet week in terms of the economic calendar. The general medium-term upside bias for global indices remained supported for the most part of this week. However, global indices are extended and many analysts expect a pullback at some point. The USD saw some mixed action and the talk of whether the Federal Reserve will taper bond purchases should continue to push and pull the USD. US 10 year yields dropped lower through the 1.60% level and if this remains next week then the USD bearish bias could continue. Bitcoins falls moderated this week on long term investors stepping in and it looks like $30,000 is a near term floor.
Other key events from the past week
- NZD: Interest Rate meeting, May 26: The last CPI data print surprised to the upside and Retails Sales data this week was strong. This allowed the RBNZ to signal interest rates hikes coming from September 2022 strongly boosting the NZD this week. AUDNZD saw a strong downside as expected.
- DXY: Two drivers, May 24: The USD is being driven by two things; expectations of bond tapering and inflation expectations. As long as the Fed is looking like tapering then the USD will find buyers. If they retreat from tapering then the USD will find further selling. Focus on tapering talk to understand the USD.
- Bitcoin Base: Finds support, May 25: Tesla’s CEO Elon Musk helped support Bitcoin this week tweeting about N.American Bitcoin miners wanting to address environmental concerns around Bitcoin mining. Is $30,000 the base for now?
Key events for the coming week
- AUD: Interest Rate meeting, June 01: The last set of RBA minutes show a keen focus on unemployment data. No change is expected next week in interest rates and a bearish meeting will likely accelerate further AUDNZD selling next week.
- OPEC: More upside for oil? June 01: Investors will be watching the OPEC+ meeting carefully for any signs of supply cuts to further boost oil. Will price break and be able to stay above $68 or will that cap US oil prices for now?