US indices hit all-time highs. Inflation in New Zealand is slowing down

Bank of America (BAC) closed higher by more than 5% after reporting a second-quarter net interest income of $13.86 billion, better than the consensus of $13.81 billion, and estimating fourth-quarter net interest income of $14.50 billion, above consensus of $14.33 billion. Morgan Stanley (MS) closed higher by more than 1% after reporting second-quarter net sales of $15.0 billion, above the consensus expectation of $14.27 billion.

US retail sales for June were unchanged m/m, stronger than expectations for a 0.3% m/m decline. Additionally, June retail sales excluding autos rose 0.4% m/m, stronger than expectations of 0.1% m/m.

Bitcoin (BTC/USD) climbed above the $65,000 mark, hitting its highest level in nearly a month amid renewed bullish sentiment toward digital assets. Data showed that daily net inflows into 11 US spot bitcoin ETFs totaled $422.67 million on July 16, the highest since June 5 and extending the positive momentum to eight consecutive days.

The UK’s annualized inflation rate for June 2024 was 2%, the same as in May and at the 2021 low, although market estimates pointed to 1.9%. The annual rate of core inflation in the UK in June 2024 was 3.5%, holding steady for the second consecutive month and at its lowest level since October 2021. The data matched market estimates, with the annualized CPI services rate at 5.7% for the second consecutive month.

WTI crude oil prices hovered near $80.8 a barrel on Wednesday, trying to break a four-day slide as lingering demand concerns in top consumer China were offset by a decline in US inventories. China’s second-quarter GDP growth and June retail sales came in below expectations, dragged down by the ongoing real estate market crisis and job insecurity. Meanwhile, the IMF estimates moderate global economic growth over the next two years, including a slowdown in the US, stabilization in Europe, and increased consumption and exports in China.

Asian markets traded mixed yesterday. Japan’s Nikkei 225 (JP225) rose by 20%, China’s FTSE China A50 (CHA50) gained 0.10%, Hong Kong’s Hang Seng (HK50) fell by 1.60% and Australia’s ASX 200 (AU200) was negative 0.23%. On Tuesday, China’s Central Bank injected the largest amount of cash into the Chinese banking system since January to offset the impact of the tax season and maintain ample liquidity. That will support Chinese indices.

The offshore yuan settled at 7.285 per dollar, holding near a one-week low as investors digested Chinese President Xi Jinping’s recent speech at the Third Plenum. Xi urged the Communist Party to maintain “unwavering faith and commitment” to its strategic program amid a challenging domestic and international environment characterized by sluggish economic growth and geopolitical tensions. He also emphasized that Beijing intends to prioritize technology, advanced manufacturing, and other critical sectors necessary for China’s long-term sustainability.

The New Zealand dollar rose to $0.606 on the back of inflation data. New Zealand’s annual inflation rate slowed to 3.3% in the second quarter, the lowest in three years, from 4% in the previous period. However, the latest figure remains outside the Reserve Bank’s target range of 1–3%. The Central Bank expects inflation to return to the target range later this year and will only consider cutting rates once it is satisfied that inflation will remain within that range.