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Hang Seng Index futures closed up 1.25% at 19,841 points in the night session, 257 points higher than the previous session.Congressional Budget Office (CBO): The cost of clean energy subsidies in the inflation-proof bill is now expected to be $825 billion between 2025 and 2035, compared with an estimated cost of $270 billion between 2022 and 2031.The Federal Reserve accepted a total of $118.327 billion from 32 counterparties in fixed-rate reverse repurchase operations.The Federal Aviation Administration (FAA) said it was working with SpaceX and relevant authorities to confirm reports of damage to public property in the Turks and Caicos Islands.Futures traders are adjusting their bets in the Treasury market after mild inflation data and dovish comments from a Federal Reserve official. Over the past two days, the volume of open interest has changed, consistent with traders exiting short positions in two-year Treasury bonds and establishing new long positions in longer-term Treasury contracts, especially in the five-year Treasury. The shift came after consumer price inflation data released on Wednesday and comments made by Federal Reserve Governor Christopher Waller the next day. Data released on Wednesday showed that core price increases in December were lower than economists expected; Waller said that if the trend continues, officials may cut interest rates again in the middle of the year. Morgan Stanleys interest rate strategists suggested late Thursday that long positions could be established in Treasury bonds of this term given expectations that the Federal Reserve will cut interest rates in March, but this is still a minority view. The swap market expects only a 6 basis point rate cut in March, which means there is about a 25% chance of a 25 basis point cut. “We haven’t ruled out a rate cut in March, but we do see it as more of a tail risk,” said Stephanie LaRosiliere, head of fixed income strategy at Invesco. “It doesn’t feel like the Fed needs to react so hastily.”

AUD/NZD Extends Range Above 1.0950 As New Zealand Trade Balance Data Is Positive

Alina Haynes

Jan 30, 2023 15:29

AUD:NZD.png 

 

After opening with a gap down to 1.0926, the AUD/NZD pair displayed a robust recovery in the early Asian session. The cross is gaining ground despite the publication of upbeat New Zealand Trade Balance numbers.

 

December exports grew to $6.72 billion from $6.34 billion, while imports declined to $7.19 billion from $8.52 billion. The annual Trade Balance came in at -14.46 billion New Zealand dollars, as opposed to the previously stated -14.98 billion.

 

The New Zealand Employment Statistics, which will be issued on Wednesday, will provide investors with direction. It is projected that the Employment Change (Q4) will decrease to 0.7% from 1.3% in the previous publication. The unemployment rate is anticipated to hold steady at 3.3%. As a result of the Reserve Bank of New Zealand's decision to raise interest rates, the New Zealand economy is unable to create significant employment opportunities (RBNZ).

 

The labor cost index statistics will otherwise dominate the conversation. The employment bills index (annual) is anticipated to rise to 4.45 from 3.8% previously. And the expected quarterly figure is 1.3%, up from 1.1% in the previous report. Since households would have more liquid assets, a rise in labor expenses might keep inflationary pressures on the rise.

 

Notably, the New Zealand economy has shown no indications of inflation abating, as the annual Consumer Price Index (CPI) (Q4) grew to 7.2% from the consensus forecast of 7.1%, and an increase in retail demand will intensify inflationary pressures.

 

On the Australian front, investors are keeping a tight eye on Tuesday's retail sales report, which is expected to reveal a 0.3% fall from the previous release of 1.4%. This could reduce difficulties for the Reserve Bank of Australia (RBA), which is battling to contain the persistent inflation in the Australian economy.


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