Nasdaq => The index hovers around 2022 low
Nvidia => The stock trades around a yearly low
EUR/NZD => The pair falls below 1.6500
NASDAQ looks to FOMC minutes
The NASDAQ fell 2.3% in the previous session after a profit warning from Snap spooked the markets. Snap warned that the economic outlook had deteriorated faster than expected and raising fears that advertising spending had peaked. Those tech stocks reliant on advertising revenue, such as Meta, Alphabet, and Twitter, fell steeply. Weaker than forecast US business activity data added to the downbeat mood. Today the index is attempting to rebound as attention turns to the release of the minutes from the May FOMC meeting, where the Fed raised interest rates. Should the minutes reveal a more hawkish stance, the Nasdaq could come under pressure.
|US Composite PMI May||Expected: 53.8 (0.6)||Previous: 56|
Where next for Nasdaq?
The Nasdaq has been trending lower since the start of April, forming a series of lower highs and lower lows. The index hit a low of 11500 and has since been consolidating just marginally higher. The RSI supports further downside while it remains out of oversold territory. Sellers will need to break below 11700, the 12 May low, and 11500, 2200 low, to continue the downtrend towards 11000 round number. Buyers will be looking for a move over resistance at 12075, the weekly high, to expose the 20 sma at 12420, and the May 17 high of 12600 to create a higher high.
Nvidia Q1 earnings preview
Nvidia will report Q1 earnings after the market close. Expectations are for EPS to rise to $1.30, up from $0.92, in the same period a year earlier, on revenue of $8.12 billion, up from $5.66 billion in Q1 2021. The results come as the share price has fallen over 40% so far in 2022 on fears of higher interest rates, soaring inflation, and slowing growth hitting the chipmaker. Attention will be on data centre sales, which are expected to come in 75% YoY at $3.58 billion, above gaming sales which are expected at $3.46 billion, as the reopening of the economy sees gaming demand slow.
EUR/NZD falls after RBNZ hikes rates
EUR/NZD 0.5% in the previous session, after ECB’s Christine Lagarde made more hawkish comments lifting the euro. Lagarde said that she would support a 50-basis point rate hike should it be required. The comment comes following hawkish comments earlier in the week, which implied that the ECB could hike rates several times across the summer. Meanwhile, the kiwi fell as risk sentiment soured, although the decline was short-lived, and today, the pair is surging higher today after the RBNZ raised interest rates by 0.5%. The large rate hike was broadly expected, but the central bank also released more hawkish guidance for future policy boosting the NZD. The RBNZ supports front loading rate hikes saying that this reduces the risk of inflation becoming embedded. Looking ahead, German GDP data and another speech by Lagarde will be in focus.
|EZ Composite PMI
German GDP Q1 QoQ
|Actual: 54.9 (0.9)
Expected: 0.2% (0)
Support can be found at 1.6367 (weekly low) and 1.6175 (50 sma).
Resistance for the pair can be seen at 1.67 (weekly high) and 1.6848 (May high).