RBNZ maintained its policy rate unchanged at 5.5% for the seventh consecutive meeting [Video]

Federal Reserve’s (Fed) Christopher Waller gave a C+ to the latest US inflation data, saying that it’s ‘far from failing but it’s not stellar’. Equity investors, however, continue giving the US stock indices a big, fat A+ on robust earnings, yes, but also on hope that the Fed could cut rates one, or two times this year, although there is not much conviction regarding the feasibility of the latter policy easing given that the first three months of the year warned that inflation’s path toward the Fed’s 2% will be all but smooth. So the risks prevail, but the FOMO – the fear of missing out – keeps equity bulls running. The S&P500 and Nasdaq, they both closed yesterday at a record high.

But note that the same ‘good but not stellar’ came from the UK inflation report this morning. Inflation in Britain fell, but fell less than expected by analysts. Inflation in Canada, on the other hand, fell more than expected in April and core inflation eased to 1.6% fueling the expectations that the Bank of Canada (BoC) could also overtake the Fed and cut the rates before the Fed. On the flip side of the world, the Reserve Bank of New Zealand (RBNZ) maintained its policy rate unchanged at 5.5% for the seventh consecutive meeting pointing at still-high inflation.

Today is probably the most important and certainly the most-awaited day of the earnings season as Nvidia is due to reveal its Q1 earnings after the bell. Option markets were pricing in a post-earnings move of more than 8% up or down for Nvidia at last week’s close, a move that could shake the S&P500 0.4% up or down according to Citigroup.