Equities recover on Wednesday amid improving sentiment.

18/08/2021

Wednesday has been bullish for equities so far, and both EU and US indices were trading stronger during the London session.

Yesterday, US indices dived as equities remain overextended above their respective moving averages. However, the medium-term outlook still seems bullish, and investors are usually buying short-term declines. 

Traders also paid attention to the RBNZ meeting. The central bank was expected to deliver the first rate hike in a long time, but it has failed to do so, and the official cash rate stayed unchanged at 0.25%. 

Additionally, the RBNZ Minutes said, “Committee agreed that their least regrets policy stance is to reduce monetary policy stimulus further.” While portraying a cautious optimism, RBNZ’s Orr said, “Lockdown is a concern, but less concerned than would have been last year.”

The kiwi dropped in the initial reaction to nine-month lows below 0.6880 only to rally back to unchanged on the day after Orr's remarks. 

 From other news, European CPI numbers will be released today and might cause some volatility in the EURUSD pair. However, investors expect an actual decline in inflation on a monthly basis, which is really funny considering how prices of everything are skyrocketing. 
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