OIL: OPEC+ Discussions Weigh Heavy on Oil

AUDUSD bounced to 0.6390 in early trading today following comments from President Trump that he wouldn’t fire Fed Chair Powell and that China’s tariffs wouldn’t finish at the current 145%. It gave up those gains to fall to 0.6355, below initial support.

• The recovery in risk appetite drove a broad based recovery in the US dollar on Tuesday with only CAD posting an increase against the greenback (BBDXY +0.5%). AUDUSD was a mid-range performer with the pair down 0.8% to 0.6365, close to the intraday low. It had risen to a high of 0.6439 during Asian trading.
• AUDUSD’s clearance of key resistance at 0.6409 reinforces bullish conditions. Initial resistance is at 0.6439, 22 April high, while support is at 0.6370, 21 April low. A clear break of the 20-day EMA at 0.6291 would be a concern for Aussie bulls.
• AUDJPY fell 0.3% to 90.13 on Tuesday after a low of 89.64 but has jumped 0.8% to 90.81 today. AUDEUR was little changed at 0.5573 yesterday but in early APAC trading is up 0.7% to 0.5614. AUDGBP fell 0.4% to 0.4775 and is currently +0.5% to 0.4798.
• Kiwi continued to outperform Aussie with AUDNZD down 0.2% to 1.0672 on Tuesday but recovering to 1.0697.
• Equities rallied with the S&P up 2.5% and Euro stoxx +0.5% and the S&P e-mini is +1.4% so far today following Trump’s comments. Oil prices were stronger with Brent +2.4% to $67.82/bbl. Copper rose 2.5% and iron ore is around $99/t.
• Today Australia’s preliminary April S&P Global PMIs print. 

The NZD had a range overnight of 0.5964 - 0.6029, Asia is pressing the lows as risk attempts to bounce once more.

• Treasury Secretary Bessent Tuesday privately told investors the tariff standoff is unsustainable and he expects de-escalation with China.
• “The IMF slashed its world growth forecast for this year and next, warning the outlook may deteriorate further amid risks of a global trade war. China’s growth estimate was cut to 4% in 2025 and 2026, down by 0.6 and 0.5 percentage points. Tariff threats have created uncertainty that’s “off the charts,” the funds chief said.”(per BBG)
• The move higher on Monday was in thin liquidity and looked overdone, as markets have stabilised and risk probes higher once more the move to sell USD has been unwound.
• The NZD could not hold onto to its gains above 0.6000 and has quickly retraced, after such a big move in such a short period, it would be healthy for the NZD to see a pullback and some consolidation.
• The price action continues to suggest though that dips will probably find demand, first support on the day is 0.5900 then 0.5800/50.
• CFTC data show Asset managers have been aggressively paring back their shorts last week, Leveraged funds not so much.
• NZD/USD: $0.5855(N$704mln) Expiry for Apr23 NY cut 1000ET (Source DTCC)
• Data : US S&P Global Services & Manufacturing PMI

Fig 1: NZD/USD Spot Hourly Chart

Source: MNI - Market News/Bloomberg

Gold is down sharply in early Wednesday dealings, with bullion off around 1.4%, last tracking near $3330/35. This follows an early bounce in the USD, which has been supported post comments made by US President Trump, who stated he has no intention of firing Fed Chair Powell. Gold session lows rest at $3315.94. 

• The Trump remarks has boosted USD sentiment, as firing Fed Chair Powell would have eroded confidence in Fed Independence and hurt US exceptionalism. Gold is under pressure as it was seen as a natural beneficiary to eroding US exceptionalism.
• Outside of the USD move, we also have US equity futures up strongly, another gold headwind in the near term.
• Technically, the gold outlook is still bullish. The yellow metal traded to another fresh all-time high (briefly at the $3,500 level on Tuesday). Note too that moving average studies are unchanged, they remain in a bull-mode position highlighting a dominant uptrend. The next objective is $3,547.9, a Fibonacci projection, if a break back above $3500 can be sustained. Initial firm support lies at $3163.5, the 20-day EMA.