RBNZ Holds Steady, Global Indices Under Pressure, and Oil’s Bearish Turn

First and foremost, the industrial production numbers from China were notably weaker, coming in at 3.7% instead of the expected 4.3%. From Canada, we received a slightly higher inflation rate of 0.6%, surpassing the expected 0.3%. Additionally, retail sales data from the U.S. was a positive surprise, reporting at 0.7% instead of the projected 0.4%.

Today started with the official interest rate decision from New Zealand, which remained steadfast at 5.5%. The Reserve Bank of New Zealand commented that the official cash rate needs to remain restrictive for the foreseeable future, expressing confidence that this approach will steer the CPI back to the target.

Still on the horizon, we’re anticipating the UK inflation data, which is projected to drop to 6.7%. And as the day winds down, keep an eye out for the FOMC meeting minutes from the U.S.

Yesterday, the only currency flexing its strength was the British Pound, while others corrected. As Wednesday unfolds, we’re seeing positive moves in the New Zealand Dollar, Japanese Yen, and Euro. On the flip side, the Australian Dollar and British Pound are trading softer. However, the moves are quite tame; the currency market seems to be in a low-volatility phase for now.

The EURUSD pair is hovering close to its monthly lows, while USDJPY confidently sustains its position above the 145 resistance level. Notably, the NZDUSD pair seems to be bouncing off its monthly lows, and with the recent interest rate decision and comments from New Zealand’s central bank, we might be witnessing the start of a bullish correction.

Yesterday was a tough day for indices. The S&P 500 dipped significantly, establishing new monthly lows — a fate shared by the Dow Jones. The DAX is opening its Wednesday trading on a precarious ledge, hinging on the key horizontal support at 15,700 points. A breakout below this support could trigger a serious mid-term sell signal.

Moving to commodities, precious metals didn’t have their finest day, with both gold and silver marking new monthly lows yesterday. Oil wasn't spared either; after a significant tumble, WTI now views $83 per barrel as a formidable resistance, while Brent is eyeing the $88 per barrel mark warily. Since touching these price levels, both benchmarks have embarked on a bearish correction.