Daily Market Update

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Jun 22, 2021 | Currency Market Analysis

Global Themes

Shares, kiwi rebound as Fed commentary steps back from hikes

• Financial markets gain as Williams calms
• NZDUSD rebounds from 2021 lows
• Fed’s Powell to speak tonight

Mixed messages from Fed

Global sharemarkets rebounded strongly overnight after key Federal Reserve officials stepped back from talk of rate hikes.

Others, however, continued to talk about a potential easing of stimulus.

New York Federal Reserve President, John Williams, said overnight that the US economy has not grown enough to pare stimulus and he expected inflation to fall once re-opening bottlenecks are resolved.

On the other hand, James Bullard and Robert Kaplan, other key Fed members, said it was already time to consider winding back support.

Kiwi rebounds

Financial markets focused on Williams’ comments with the Dow Jones up 1.8% and the Nasdaq up 0.6%.

The NZDUSD gained 0.8%.

The kiwi was higher in most other markets with the best gains in the NZDEUR (up 0.5%) and NZDJPY (up 0.9%).

More Fed to come

The focus remains on the Federal Reserve with FOMC chairman Jerome Powell speaking to Congress overnight.

Locally, consumer sentiment and credit card spending are both released today.

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