Bitcoin euphoria is in full swing. The RBNZ left interest rates unchanged

On Tuesday, we experienced another cautious and calm session on the US stock market. The performance of stock indices was mixed. The Dow Jones lost slightly, but the SP500 as well Nasdaq Composite at the end of the day they were in moderate positive territory. Since this morning, the EUR/USD rate has been decreasing towards 1,0815 after yesterday's maximum of around 1,0865.

Bitcoin continues its rally this morning. It has already gained about 15% since the beginning of the week. Based on macro data, we received a worse result on the Conference Board consumer confidence index. Investors are waiting for tomorrow's publication of the report on Americans' spending.

New projections and "dot" chart

The market continues to retreat from its optimistic assumptions regarding rapid Fed rate cuts. Currently, the valuation is similar to the Federal Reserve's forecasts from December, when new projections and a "dot" chart were presented. Probability of reducing the cost of money in June dropped to around 54%.. March is completely rejected and the chance of changing the monetary policy parameters in May is below 20%.

US Treasury Secretary Janet Yellen emphasized the role of the United States, noting that "the US path to a soft landing supports global growth." She spoke about threats to the outlook, including prolonged conflicts in Ukraine and the Middle East, which can raise commodity prices and disrupt supply chains, and about the debt problems of some countries.

From the data, we obtained the Conference Board consumer confidence index, which dropped to 106,7 points. (consensus 115), and the January one was revised down to 110,9 from 114,8 points. The Richmond Fed regional manufacturing index was less negative than expected and amounted to -5 points. (forecast -9 points) vs. -15 points. previously. Orders for durable goods also performed poorly (-6,1% m/m), and those excluding transport dropped by 0,3%. m/m. Today we will learn the second respect CBA for the USA in the fourth quarter. The market consensus assumes an unchanged reading of 3,3%. q/q on an annual basis.

RBNZ decision, New Zealand's currency loses

Today at night Reserve Bank of New Zealand left interest rates unchanged (5,5%). However, the tone of the statement was dovish, as policymakers stated that the risks to the inflation outlook had become more balanced. To some extent, the market had previously assumed that the central bank might decide on another rate hike. Now such a scenario has become unlikely and thus the NZD has lost its value. The NZD/USD pair fell to around 0,61 from 0,6175 before the decision.

The EUR/USD rate continues to decline this morning and is heading towards horizontal support at 1,08. Gold is still within the upper limit of the descending channel, where it remains until the end of 2023.

BTC most expensive since November 2023

Today, the price of the main cryptocurrency is growing dynamically again. The increases reach 2,6 percent. and since the beginning of the week it is less than 15 percent. The Bitcoin-based CFD is the most expensive since November 2023. Let us remind you that it will happen this year halving – i.e. the process of reducing the reward for miners mining new cryptocurrencies. In January, the U.S. Securities and Exchange Commission (SEC) approved the first Bitcoin ETF.

Source: Łukasz Zembik, OANDA TMS Brokers