ACY Securities

A weaker than expected US ISM Services PMI coupled with Factory Orders falling more than expected, dragged the Dollar and bond yields lower. Risk-off pulled stocks down. The ISM Services PMI slumped to 52.6 from 53.4 previously, missing forecasts at 53.0.

The global financial landscape is marked by a delicate balance, with the USD exhibiting resilience after a recent sell-off and Europe facing critical events shaping its FX (EUR) dynamics.

As we currently witness ongoing deliberations among Central Banks on whether to adjust interest rates, major players like the European Central Bank (ECB) and the National Bank of Belgium are sending mixed signals.

Last Thursday marked the conclusion of February, closing with a surge in equities. The market attributed these movements to the in-line Personal Consumption Expenditures (PCE) print, which alleviated concerns of another spike in inflation.

The US ISM Manufacturing PMI in February fell to 47.8, way below estimates of 49.5, and 49.1 previously. US Bond yields tumbled, with the 10-year rate settling at 4.18% (4.25%). The 2-year US treasury rate slumped 11 basis points, finishing at 4.53%.

Japan’s Yen outperformed its peers, the US Dollar breaking below 150 to settle at 149.85 in late New York. Comments from a Bank of Japan official on a potential exit from its ultra-easy monetary policy boosted the Yen.

Don't count on the idea that the United States will always be exceptional. Right now, currency markets are moving very little, and there isn't much happening to make them change. As we approach the end of the month, some news stories suggest the US dollar might get weaker.

In January, the monthly Consumer Price Index (CPI) in Australia experienced a decline of -0.33% compared to the previous month, resulting in a year-on-year growth rate of +3.40%.

At the beginning of this week, major foreign exchange rates have maintained narrow trading ranges.

The Official Cash Rate (OCR) in New Zealand stands at 5.5%, according to the latest data, aligning with the GSe/Bloomberg Consensus.

Heading into this morning’s RBNZ Rate Decision meeting, the Kiwi (NZD/USD) steadied to 0.6170, little changed from 0.6165 previously.

Over the past week, the US dollar experienced a slight decline, marking the end of five consecutive weeks of gains.