Trump has nominated hedge fund manager Scott Bessent to be Treasury Secretary, and markets embraced the idea, with US Bond Yields tumbling and the DOW hitting new record highs. A market man in place of the failed academic bureaucrats is a welcome step forward, while Bessent has endorsed Trumps tariffs policy. The Chicago Fed National Activity Index and the Dallas Fed Manufacturing Index remained deeply negative, ahead of a possible boost for US manufacturers, with the advent of Trumps tariff policy. The US Dollar drifted lower, with the EUR looking to regain 1.0500, while the GBP pushed back to 1.2550.
The softer reserve allowed the NZD to consolidate above 0.5800, ahead of the key RBNZ rate decision. The RBNZ is expected to cut rates and possibly by 50 basis points, which should add downside pressure to the KIWI. The AUD traded around 0.6500, ahead of the release of important inflation numbers, which will determine the direction of the RBA and the currency.
