Hits Fresh YTD Lows, RBNZ Speeches In Focus Today

NZD/USD currently tracks at 0.6040, after printing fresh YTD lows overnight. We are now back at levels last seen in the first half of 2020. Note mid May 2020 lows around 0.5920 is a potential downside target amidst on-going USD strength. The focus today will be on two RBNZ speeches, which will cover the August monetary policy statement.

• Prior to these speeches we get manufacturing activity for Q2, another partial indicator ahead of next week's GDP report. There is no consensus estimate, with the last print being -3.5% in q/q terms.
• RBNZ Deputy Governor Hawkesby speaks first, at 11am local time. Followed by Chief Economist Conway (at 12pm).
• The Deputy Governor's speech is likely to carry more weight, with the market focus on the policy outlook for the remainder of the year, with two policy meetings left (the next is on October 5).
• Current market pricing has the policy rate just shy of 4.00% by year end, before peaking close to 4.50% in May of next year. Recall the central bank raised its terminal policy rate projection to 4.10% at the last meeting.
• Earlier RBNZ Assistant Governor Silk stated the central bank was well placed to managed the wind down of its additional monetary policy tools.
• Overnight, the GDT whole milk powder average auction price rose to $3610/tonne, from $3417 previously. This was a 5.65% gain, although we are still 24% lower from 2022 highs.