Inflation Report Takes Focus Ahead Of Live August RBNZ Meeting

Risk aversion pressured NZD/USD on Thursday, with the rate giving away the bulk of its post-RBNZ gains. Softer commodity complex sapped strength from the Antipodeans, while the greenback remained buoyant.

• The rest of the "big 4" Kiwi banks increased mortgage rates, following the example of ASB, who raised their home loan rates even before the latest RBNZ Monetary Policy Review.
• Nine analysts surveyed by Bloomberg suggested that the OCR will not be raised anywhere near its previous peaks and probably won't surpass 2% in the coming years, even as the RBNZ are expected to begin the tightening cycle this year.
• With the August monetary policy meeting now widely deemed live, today's quarterly CPI report is set to provide much interest. Headline annual consumer price inflation is expected to print at +2.7%, according to Bloomberg consensus forecast. Later in the day, the Reserve Bank will release the sectoral factor model, its preferred metric of core inflation.
• Separately, BusinessNZ M'fing PMI is due at the bottom of the hour. Next week, focus turns to credit card spending, coming up on Wednesday.
• NZD/USD last sits at $0.6987, just above neutral levels. A rally above Jul 15 high of $0.7045 would clear the way to Jul 6 high of $0.7105. Conversely, a dip through Jul 13 low of $0.6917 is needed to give bears some fresh momentum.