The NZD/USD pair has failed to sustain above the crucial resistance level of 0.6180, indicating a potential sell signal. The US Dollar Index has shown recovery, and consistent US consumer spending and a jump in the labor cost index have advocated for further interest rate hikes from the Fed. Pre-Fed policy anxiety has kicked in, causing mild losses in the S&P500 futures. However, JP Morgan and PNC are submitting final bids for First Republic Bank in FDIC auction, which might infuse some confidence in investors as it would ease US banking jitters.
S&P500 futures are facing mild losses in early Asia as pre-Fed policy jitters are causing anxiety among investors. However, the 500-US stocks basket was heavily bought on Friday, suggesting a cautious approach amid a positive market sentiment. Mild losses in the S&P500 futures may be short-lived as JP Morgan and PNC are submitting a final bid for First Republic Bank in the Federal Deposit Insurance Corporation (FDIC) auction, which could alleviate banking concerns in the United States and boost investor confidence.
The US Dollar Index (DXY) has extended its recovery above 101.70 as the probability of a consecutive 25 basis point (bp) interest rate hike from Fed chair Jerome Powell is high. The consistent consumer spending and jump in labor cost index data released on Friday suggest further interest rate hikes from the Fed.
The US core Personal Consumption Expenditure (PCE) Price Index remained stable in March at 0.3%, as expected by market participants. Meanwhile, the Employment Cost Index (Q1) increased to 1.2% from the previous and consensus release of 1.1%.
Investors will keenly watch the US ISM Manufacturing PMI (April) on Monday, anticipating mild gains in PMI figures to 46.6 vs. the previous release of 46.3. The New Orders Index data, which indicates forward demand, is expected to jump to 45.5 from the prior release of 44.3.
On the New Zealand dollar front, investors are eagerly waiting for the release of the Q1 NZ employment data. Employment Change is expected to remain steady at 0.2%, while the Unemployment Rate is seen rising to 3.5% from the prior release of 3.4%. The quarterly Employment Cost Index is expected to remain unchanged at 1.1%. A decline in job additions and an increase in jobless rates could prompt the Reserve Bank of New Zealand (RBNZ) to consider pausing the policy-tightening process.