New Zealand’s electronic card retail sales recorded a year-on-year decline of 1.6% in March, an improvement from the previous drop of 4.2%.
In the foreign exchange market, AUD/USD trades near 0.6300 as risk appetite improves due to lower US tariffs on China’s electronic supply chain. Conversely, USD/JPY has fallen to around 142.50, influenced by the US Dollar’s weakening and expectations of differing monetary policies.
Gold Market Trends
Gold prices have retreated from record highs of $3,245 amid decreased demand for safe havens and a strengthened US Dollar. The coming week anticipates a rate cut by the ECB, while the BoC may hold rates steady, with focus on CPI data from various countries.
Wall Street saw a surge following a tariff delay announcement, yet concerns about ongoing trade tensions with China persist, leaving recession fears lingering.
The March card spending data from New Zealand, while still negative year-on-year, shows a reduced pace of contraction compared to February’s result. Retail activity remains under pressure, though the smaller decline hints at stabilisation, possibly reflecting early signs of resilience in consumer sentiment. For now, there’s no strong indication that demand is recovering outright, but the pace of deterioration may be levelling off. We’ve noticed that households are responding more cautiously to inflation and higher borrowing costs – a pattern that tends to inform broader economic expectations.
Looking west, the Australian dollar has nudged higher against the US dollar, hovering near the 0.6300 mark. That’s largely on the back of revived risk appetite, which followed the easing of US tariffs on China’s electronics sector. The move has been interpreted as a modest thaw in trade relations, offering some breathing room to commodity-linked and regional currencies. Provided this tone extends, volatility in AUD pairs may soften somewhat, although much will hinge on inflation trends and any shift in Reserve Bank guidance.
Currency Market Fluctuations
In contrast, dollar-yen has drifted lower, edging down to 142.50, and that’s worth keeping an eye on. Beyond the softer greenback, markets increasingly anticipate that the Federal Reserve and the Bank of Japan may head in diverging directions. As rate expectations become more firm, any widening in interest rate differentials could reintroduce directional bias. For short-term views, it matters whether US data keeps leaning dovish, especially surrounding labour conditions and services inflation.
Meanwhile, gold has cooled off. After briefly touching new highs above $3,200, prices have since fallen back under pressure. Much of the loss follows from declining bids for safe havens and a bounce in the US dollar across several G10 pairs. Those who track positioning and ETF flows may sense the market is recalibrating speculative excess, not necessarily flipping into long-term bearishness. With no fresh geopolitical catalyst emerging, traders should adjust to less dramatic moves than those seen in early April.
Policy divergence continues to feature prominently. The European Central Bank appears likely to start easing next week. Inflation figures remain tame enough for them to justify the move, though the exact pace beyond June could be more deliberate. As for Canada, there’s a strong case that rates could remain in a holding pattern, at least until there’s a firmer read on their domestic inflation prints. Upcoming CPI releases across multiple regions are set to drive further re-pricing in rate-sensitive instruments, particularly in short-end curves.
Equity markets surged in response to the delay in US tariffs; Wall Street found buyers as short sellers moved to cover positions. However, even with the relief, sentiment remains somewhat fragile. The uncertainty around China-US trade relations continues to generate caution, not least because there’s little clarity on longer-term intentions from either capital. This rather unstable calm leaves equity volatility priced at a premium should talks stall again. What we’ve seen is that credit spreads narrowed slightly late in the week, implying traders are willing to nibble on risk, but not in size.
