 Forex markets have turned noticeably risk-off today, with Aussie and Kiwi showing broad-based declines. Despite Loonie holding strong, it is being outperformed by both Dollar and Yen. Meanwhile, European majors present a mixed picture, with Sterling lagging behind Euro and Swiss Franc. Today's PMI data illustrated a 'two-track' economy in Europe, marked by robust services and weak manufacturing. Despite the resilience of services sector helping to stave off recession, questions linger about the longevity of this support given the prevailing high inflation. Furthermore, in countries like UK where services sector is a large portion of the economy, it is likely that BoE will be compelled to persist with tightening measures in order to suppress demand. Attention now turns to the upcoming Asian session featuring an anticipated rate hike by RBNZ, placing NZD/USD in the spotlight. Recovery of NZD/USD from 0.6181 appears to be corrective so far, suggesting potential for further downside. Break below 0.6181 could trigger a rapid descent towards 0.6083 low. While a break above the 0.6304 resistance would extend the recovery, near-term outlook will continue to be bearish as long as 0.6383 resistance holds, just that downside breakout is delayed. In Europe, at the time of writing, FTSE is up 0.31%. DAX is down -0.33%. CAC is down -0.97%, Germany 10-year yield is up 0.0328 at 2.492. Earlier in Asia, Nikkei dropped -0.42%. Hong Kong HSI dropped -1.25%. China Shanghai SSE dropped -1.52%. Singapore Strait Times rose 0.22%. Japan 10-year JGB yield rose 0.0167 to 0.404. |
