NZD Jumps As Rate Hike Expectations Accelerate

NZD is top of the pile again today. NZD/USD up 33 pips, punching through resistance from Jul 15 high of $0.7045 as updates to sell-side RBNZ views in reaction to New Zealand's latest labour market report have started to trickle through; all of the big 4 now look for 25bp hikes at each of the final three meetings of 2021. Data showed the unemployment rate dropped to 4.0% (BBG est. was 4.4%) from the revised 4.6% recorded in Q1 on the back of a stronger than expected surge in employment.

• AUD/USD is up 3 pips, data showed final July services PMI in-line with the previous at 44.2, composite also in-line at 45.2, earlier construction PMI fell to 48.7 from 55.5. Retail sales remain on the docket on Wednesday while Chinese Caixin services & composite PMI readings will also be released today.
• USD/JPY is down 4 pips. Markets await Jibun Bank services PMI later in the session. PM Suga said Tuesday that Japan will now only hospitalise severe and high-risk cases of Covid-19 to ease pressure on the healthcare system.
• Offshore yuan is flat after finishing with some mild losses on Tuesday. As mentioned previously markets await services PMI data after a weak set of official and Caixin manufacturing PMI figures earlier this week. The coronavirus situation continues to be a focus with case numbers creeping up and lockdowns tightened.