On Monday, commodity prices continued to rise, with oil adding about 1% after the publication of the monthly OPEC report, which forecasted an increase in consumption by 4.2 million barrels per day in 2022 amid the global economic recovery. In addition, the price of aluminum exceeded $ 3,000 per ton for the first time since 2008. In general, commodity currencies received support, and the demand for risk persisted.

Today's focus is on the US inflation report, with some Fed hawks already expressing fears that the inflation growth may turn out to be longer than previously thought. This is the last major report that will trigger inevitable comments from committee members before the FOMC meeting on September 22 and could spur volatility and adjust market expectations for the outcome of the Fed meeting.

The preliminary content of a new bill to stimulate the US economy by 3.5 trillion was published yesterday, where some changes were made to the initial draft. In particular, it is proposed to increase the corporate tax rate for medium and large companies from 21% to 26.5% (Biden proposed earlier to 28%). A number of other changes are also proposed that increase the chances of passing in Congress. Apparently, this bill should be considered in conjunction with the actions of the Fed, since the US economy is clearly not yet ready for sustainable development without large-scale injections.

It can be assumed that the demand for risk will remain moderate today. Strong movements are unlikely, and trading will mainly remain in the range.

NZD/USD

The situation on expectations of the next actions of the RBNZ remains optimistic this morning. The markets expect that the rate will be raised by 0.25% at the meeting on October 6. On Thursday, a major report on the state of the New Zealand economy will be published, and GDP growth is expected to be 16.3% y/y, which is significantly higher than that of the rest of the developed countries.

It is worth noting that GDP declined by 11% during the 2nd quarter of 2020, while household incomes fell by only 0.1%, which allowed domestic demand to recover quickly.

As for the COVID-19 situation, the forecasts are also optimistic. A significant part of the country is moving from this week to a reduced threat level, and another wave of infections that can block the economy is not expected.

According to the CFTC report, speculators finally moved towards buying the New Zealand dollar, with a weekly change of +425 million. A net long position was formed. The estimated price rises almost vertically, which reflects the dynamics of the yield spread. This is steadily growing in favor of NZD. The yield of 10-year bonds even exceeded 2% at some point, which is a very high level in the current conditions.

We assume that attempts to move up from the channel, the upper limit of which now passes approximately along the resistance zone of 0.7110 / 20, will continue. After that, the recent local high of 0.7314 will become the target. This scenario can be canceled either by the Fed's unexpectedly aggressive position at the next meeting on September 22, or a sharp deterioration in the economic situation in New Zealand. Both of these events still look very unlikely.

AUD/USD

Australian business conditions were up 4p. up to + 14p. after a sharp decline in the last two months. The business confidence also slightly improved, but so far, the dynamics are such that it is clearly too early to talk about a stable trend.

The speculative mood on the Australian dollar looks much worse than on the New Zealand one. The net short position increased by 811 million during the reporting week and reached -5.206 billion. As we can see, this is a lot. The estimated price has slowed down the decline, but there are no signs of an upward reversal. yet.

The Australian dollar encountered resistance near the middle line of the descending channel, and it is too early to expect a resumption of growth attempts. A return to the lower border of the channel is more likely, followed by a test of the local low of 0.7108.

The AUD/NZD cross-pair continues to decline, and if we consider the dynamics of the target prices, then it can be assumed that the downward impulse has not yet been developed and it is clearly too early to look for an opportunity to buy.