MNI China Daily Summary: Wednesday, July 31

MNI BRIEF: BOJ To Raise Further, No Clues on Timing - Ueda

MNI BRIEF: BOJ's FY26 Inflation View Flat; Upside Risk To FY24, 25 Prices

MNI: PBOC Net Injects CNY185.57 Bln via OMO Wednesday

MNI: PBOC Sets Yuan Parity Lower At 7.1346 Weds; -1.39% Y/Y

MNI BRIEF: China July PMI Contracts For Third Straight Month

EZ/UK T-Bill Calendar: 1/3/6-Month UKTB Auction on Friday

Flash Inflation In-Line With Tracking; Services Softens But Only Slightly

MNI: EUROZONE JUL FLASH HICP +2.6% Y/Y

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

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Hawkish RBNZ Wagers Propel NZD Rally

NZD

The kiwi was easily the best G10 performer on Wednesday, as the RBNZ's decision to halt asset purchases under its LSAP programme boosted OCR hike wagers. The "Big 4" Kiwi banks now expect the next 25bp hike in August, while the OIS strip prices a ~70% chance of such a move. NZD/USD registered its largest upswing since Apr 14, hitting its best levels in a week.

  • NZD/USD implied volatilities faltered broadly, particularly in the shorter-end of the curve. The overnight tenor is back below its YtD mid-point after printing a four-month high on Tuesday.
  • Spot NZD/USD last trades +10 pips at $0.7043, as the kiwi retains some of its strength. The high print of Jul 6 at $0.7105 provides the initial bullish target. Conversely, a key near-term support has been defined at $0.6917, which limited losses on Jul 13.
  • Friday will see the release of Q2 CPI data, which may influence the RBNZ's thinking at the August meeting.
  • Meanwhile, Australian labour market report and Chinese activity data will be eyed today for any spillover effects.
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