Global central banks and inflation remain in the spotlight for investors on Wednesday, with the New Zealand dollar surging on hints of a possible interest rate increase.
Stocks around the globe were rising modestly ahead of comments by Federal Reserve vice chair for supervision Randal Quarles.
Asian stocks finished mostly higher, with a 0.9% gain for Hong Kong’s Hang Seng Index. The New Zealand dollar jumped 1% against the U.S. dollar, after the Reserve Bank of New Zealand said the country’s economic outlook is improving, and predicted its cash rate could gradually rise from the third quarter of next year. The central bank said it was keeping its policy tools unchanged at stimulatory levels.
Those comments come as investors keep watch for any hints that the Federal Reserve could begin to contemplate a shift in its accommodative stance to fight the economic effects of the Covid-19 pandemic.
The data calendar is empty for Wednesday, but investors will be watching for comments from Fed’s Quarles, who will give two speeches, the first on insurance regulation and the second on the economic outlook. Data earlier this month showed a sharp rise in consumer prices, but Fed officials have been at pains to reassure that they see those inflation pressures as transitory.
Elsewhere, Fabio Panetta, a European Central Bank executive board member, said it was “clearly premature” to discuss any paring of emergency asset-buying in the common-currency zone, even though the economic outlook is “improving.” He made the comments in an interview with the Nikkei that published on Wednesday. The Stoxx Europe 600 index was little changed.
But “even if central bankers want to reassure traders and sustain market sentiment in the short-term, many investors are already in the future, pricing an inevitable tapering to come,” said Pierre Veyret, technical analyst at Technical analyst at ActivTrades.
“This is likely to maintain a certain bearish pressure on investors’ mid to long term risk appetite, while new highs in the very short term remain possible,” Veyret said in a note to clients.
In other events for Wednesday, the chief executives of several big banks, including Bank of America, Goldman Sachs and JPMorgan Chase will testify in front of the Senate Banking Committee on the topic of oversight.
Bitcoin prices rose above the $40,000 mark on Wednesday, a move that lifted prices of other cryptocurrencies. Bitcoin remains 37% below an all-time high of $64,829.14 reached last month.
Ford Motor Co. (ticker: F) stock gained 2% after the company announced it will raise electric vehicle spending to over $30 billion a year through 2025 and that over 40% of vehicle volumes will be electric by 2030.
Zscaler (ZS) stock rose 10% after reporting a profit of 15 cents a share, beating forecasts for 7 cents a share, on sales of $176 million, above expectations for $163 million.
Dick’s Sporting Goods (DKS) stock gained 8% after reporting a profit of $3.79 a share, beating forecasts for $1.12 a share, on sales of $2.9 billion, above expectations for $2.1 billion.
Urban Outfitters (URBN) stock rose 10% after reporting a profit of 54 cents a share, beating forecasts for 17 cents a share, on sales of $927 million, above expectations for $900 million.
Boston Scientific (BSX) stock dropped 1% after getting downgraded to Hold from Buy at Needham.
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