Tue. Oct 19th, 2021

The combination of FOMC members’ insistence on a September cut with growing coveted cases / deaths in the United States is too much to take into account. Add a round of weak Chinese data and highlight the risks for the future. Another disappointing read from US consumers: this time one larger-than-expected -1.1% drop in retail sales has strengthened the Fed pigeon fields. NZD was the main loser after a new blockade as a result of a new Covid case. But we believe the RBNZ will go ahead and raise rates in less than 7 hours.

So the question is: will RBNZ continue to walk? I say YES. and this will trigger a rally in NZD … Even if you do a voussoir walk the new Premium trade was released a few moments ago, with the support of 2 charts and a detailed entry / target / stop.

Click to enlarge

USD and Yen Company in China and the Delta - Monthly Achievement Spx August 2, 2021 (Chart 1)

Chinese industrial production rose 6.4% year-on-year, compared to the expected 7.8%. Retail sales increased 8.5% year-on-year compared to the expected 11.5%.

These are big disappointments, and shortly before the data was released, the PBOC announced a 600 million yuan one-year loan operation, in a sign that more help could come.

The entire Asia-Pacific region is struggling with the delta, so there is no short-term change on the horizon. There was a good chunk of Japanese GDP in the second quarter as the consumer held up better than expected. People have figured out how to live (and spend) with coveted restrictions, but the big reopening that everyone was hoping for doesn’t come to fruition and uncertainty grows about what 2022 will be like.

Powell’s appearance had not shed new light on the policy debate, but Wednesday’s FOMC proceedings should add many details about the thinking / discussion that was included in the different members’ tendency toward reducing the Q4. Yields fell and the yen rose as the likelihood of a rapid series of rising Fed rates next year fades. Advanced / decreasing readings of major US indices are strongly influenced by red.

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