Markets brace for hawkish FOMC
US tech stocks experienced a pullback, with the NDX falling 1% ahead of crucial mega-cap earnings reports. This decline followed internal reports of missed revenue targets at OpenAI, sharpening focus on artificial intelligence demand and upcoming capital expenditure guidance.
Front-end US Treasury yields climbed 4 basis points as markets priced a hawkish skew into the upcoming FOMC meeting. Market risks remain skewed to the hawkish side due to expectations of core PCE running closer to 3% than 2%.
Crude oil traded resiliently above the $100 mark. WTI maintained this level despite headlines indicating the UAE will exit OPEC and OPEC+, and Iran signaling it may accept an interim deal to open the Strait of Hormuz.
Precious metals, including gold and silver, took a hit as energy concerns deepened, continuing to trade inversely to the dollar.
Australian March CPI is anticipated to print a trimmed mean of 0.9% quarter-over-quarter today, reinforcing expectations for near-term rate hikes despite slowing economic growth.
The Bank of Thailand is expected to hold its benchmark interest rate steady at 1%, maintaining an accommodative stance after the Ministry of Finance downgraded its economic growth estimate to 1.6%.
In FX, the Dollar hovered near 98.62. Overnight, AUD/USD was flat, USD/SGD rose 0.20%, and USD/CNH gained 0.2%
Aussie dollar flexes its muscles as inflation data looms
The Australian dollar remains the standout performer in major FX markets this year, boosted by two interest rate hikes from the Reserve Bank of Australia that have sharply widened Australia’s interest rate advantage over peers.
AUD/USD is hovering near four‑year highs and could be on the cusp of another leg higher on Wednesday, with key monthly and quarterly CPI data due at 11.30am AEST. These inflation results will be key, with markets already seeing the RBA as mostly likely to hike across the major currencies.
In the monthly figures, headline CPI is expected to jump from 3.7% in February to 4.8% in March as higher oil prices impact. In the quarterly data, the closely watched trimmed mean inflation rate, the RBA’s preferred core measure, is forecast to edge up modestly from 3.4% to 3.5%.
Any upside surprise, particularly in the trimmed mean, would likely reinforce expectations that policy will remain tighter for longer. That could be the catalyst the Aussie needs to punch through key resistance around 0.7222.
Across the Tasman, attention turns to New Zealand, where incoming RBNZ governor Anna Breman is scheduled to speak at 12.30pm NZST (10.30am AEST). The New Zealand dollar is vulnerable to slipping from seven‑week highs if Berman continues to signal a more relaxed stance on inflation than her trans-Tasman counterparts, especially as New Zealand growth shows signs of cooling.
The growing policy divergence between the two central banks is most clearly reflected in the AUD/NZD cross. The Aussie is trading at 13‑year highs and looks poised to challenge major resistance at 1.2200. Interestingly, that level also coincides with the pair’s long‑term, post‑floats average.
Politburo touts robust start
China’s Politburo said the economy got off to a “robust start” this year, with key data beating expectations, according to state media. Even so, leaders warned that the recovery still needs support. President Xi Jinping led the meeting, where officials highlighted the need to prepare for external challenges, strengthen energy security, and push for technological self‑reliance and tighter supply chains. The message points to continued policy support aimed at building resilience against global shocks.
Moody’s added to the positive tone by upgrading China’s outlook from negative to stable. The agency cited solid economic momentum and strong public finances, saying China’s competitiveness should limit the impact of weaker exports. Moody’s also noted support for high‑value industries and a cautious approach to managing local government debt, even as overall public borrowing rises.
In FX, USD/CNH climbed to a two‑week high, while AUD/CNH rose to its highest level in more than a week, highlighting renewed CNH weakness. USD/CNH has risen around 0.5% from its recent low of 6.8059, last seen on 14 April.
The next key resistance sits at the 21‑day EMA at 6.8423, followed by the 50‑day EMA at 6.8709.
Kiwi corrected from overbought territory
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 27 April – 1 May
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
