The New Zealand dollar gained ground in European trade away from recent multi-week lows against dollar after the Reserve Bank of New Zealand hiked interest rates to 2008 highs as expected. 

The RBNZ pointed to the need of multiple more rate hikes until inflation is brought back under control. 

The kiwi rose 0.5% against its US counterpart to 0.6246, with a session-high at 0.6200, and after losing 0.6% yesterday, resuming losses and edging near six-week lows at 0.6194. 

RBNZ 

As expected, the Reserve Bank of New Zealand increased interest rates by 50 basis points to 4.75%, the highest since December 2008. 

The RBNZ also said that lending rates will need to rise even further in upcoming months to rein in inflation.

It pointed to continued inflationary pressures in the markets, while the labor sector continues to tighten as well. 

Similarly, Federal Reserve officials asserted the need for further policy tightening as shown in the November meeting minutes until inflation is brought to 1-3%. 

The Fed expected peak interest rates at 5.5% at some time in the first half of the year, with even more rate hikes in the second half. 

Oil prices were mixed today amid ongoing concerns about a global oversupply concerns as demand wobbles . 

Russian Crude

Russian maritime crude exports spiked last week ahead of Moscow's decision to cut output by 500 thousand bpd in March.

Independent data showed global crude demand rose 1.3 million bpd in December to a record high. 

Recently the Russian government announced plans to cut local crude output after western sanctions that sought to put a price cap on Russian crude exports . 

Chinese Demand

In a sign for improving conditions in China, new home sales rose in January for the first time in a year as the country ends its zero tolerance policies for Covid 19. 

China is the world's largest crude consumer, and an economic leader for other emerging economies. 

On trading, US crude futures due in March fell 0.2% to $76.1 a barrel as of 20:32 GMT. 

Brent April crude futures rose 0.1%, or 5 cents to $83.05 a barrel. 

US services PMI rose to 50.5 in February, beating estimates of 47.3.

the Manufacturing PMI rose to 47.8 this month, above estimates of 47.7. 

US existing home sales registered 4 million units in January, below estimates of 4.09 million units. 

US stock indices declined on Tuesday as yields on US treasury bonds rallied on prospects of more rate hikes by the Federal Reserve. 

Bonds

US 10-year treasury yields rose to 3.943%, the highest since November. 

Two-year yields rose to 4.72%, while 30-year yields rose to 3.975%. 

The Fed

Markets are still assessing latest US inflation data, which showed continued growth in inflationary pressures. 

Such data pave the way for even more policy tightening by the Federal Reserve to contain inflation.

Fed member James Bullard said he doesn't rule out a 0.5% rate hike by the Fed at the March meeting. 

Goldman Sachs analysts expect 3 more rate hikes this year, at 0.25% a piece, in March, May, and June. 

Dow Jones fell 1.3%, or 440 points to 4,062, while S&P 500 declined 1.3%, or 53 points to 4,062, as NASDAQ tumbled 1.6%, or 192 points to 11,595.