MNI China Daily Summary: Wednesday, July 10

MNI BRIEF: China To Investigate EU Trade Actions

MNI BRIEF: China June CPI Hits Three Month Low

MNI: PBOC Conducts CNY2 Bln Via OMO Weds; Liquidity Unchanged

CHINA PBOC CONDUCTS CNY2 BILLION VIA 7-DAY REVERSE REPOS WEDS

MNI: PBOC Sets Yuan Parity Higher At 7.1342 Weds; -0.53% Y/Y

MNI: US MBA: MARKET COMPOSITE -0.2% SA THRU JUL 05 WK

US MBA: REFIS -2% SA; PURCH INDEX +1% SA THRU JULY 5 WK

Indeed Wages Tick Higher, But Future Revisions Are Likely

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

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Auckland Unlikely To See Alert Level Changes This Week, RBNZ Policy Decision Takes Focus

NZD

NZD/USD has traded on a heavier note at the start to the new week. The rate last operates at $0.6991, 13 pips lower on the day and in close proximity to its Nov 17 six-week low of $0.6980. Positioning ahead of this week's RBNZ monetary policy decision may be affecting price action.

  • A fall through that level would shift bearish focus to $0.6930, which marks the base of a bull channel drawn off Aug 20 low. Bulls keep an eye on the 50-DMA/Nov 18 high/38.2% recovery of the Feb - Aug sell-off at $0.7052/53/57. A break above that area would open up Nov 15 high of $0.7081.
  • On the data front, New Zealand's retail sales come out Tuesday, trade balance hits the wires Thursday, while ANZ Consumer Confidence Index is due Friday.
  • Elsewhere, the main focus this week falls on the monetary policy decision from the RBNZ. Most analysts expect the Committee to raise the OCR by 25bp but many concede that a 50bp hike is on the table. The OIS strip prices a ~36% chance of such an outsized hike to the key policy rate.
  • PM Ardern told TVNZ this morning that Auckland is unlikely to see any "significant shifts" in restrictions before moving out of lockdown and into the Covid-19 traffic light system. The decision on the move will be taken by the Cabinet next Monday and businesses should be allowed to reopen within a day or two from that date.
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