FED'S BARKIN: LOOKING FOR MORE EVIDENCE OF INFLATION'S DECLINE

BARKIN: FED SHOULD ACT DELIBERATELY, KEEP CLOSE EYE ON ECONOMY

MNI BRIEF: China Equip't Renewal Policy Includes Foreign Firms

MNI China Daily Summary: Wednesday, July 17

MNI China Press Digest July 17:  Investment, LPR, H2 Priority

MNI: PBOC Net Injects CNY268 Bln Via OMO Wed; Rates Unchanged

US Treasury Auction Calendar

Broad-based Softening In June Underlying Inflation Metrics

EZ/UK Bond Supply Calendar: Spain, France Auction on Thursday

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

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

NZD/USD Pares Post RBNZ Gains To Close Below 0.6100

NZD
Homepagemarkets-real-timeBulletMarketsForeign Exchange Bullets

The Kiwi finished Tuesday's session up 0.08% at 0.6097, while the BBDXY finished a up 0.25% at 1,250.76. The more hawkish RBNZ will continue to be the focus, with little else on the local calendar today, Governor Orr spoke at the parliamentary committee earlier this morning where he mentioned CPI inflation is slowing but the decline “is being being tempered by parts of the economy that I would say are less sensitive to interest rates”.

  • The NZD/USD hit a high of 0.6152 post RBNZ on Tuesday, but was unable to hold onto those gains, slipping throughout the day on higher US yields and slightly weaker equities. The release of FOMC minutes caused a rally in the USD, which saw the pair then make lows of 0.6083, we recovered a touch heading into the close to close up 0.08% for the session.
  • Key levels to watch: Initial resistance of 0.6152 (May 22nd highs) above here we target the 0.6200/20 (round number/ March 8 high), while initial support holds at 0.6071 (200-day EMA).
  • The US-NZ 2y is 10bp lower at -18bps
  • RBNZ Governor Adrian Orr, speaking to a parliament select committee, highlighted that while CPI inflation is slowing, domestic inflation remains high and less responsive to interest rates, with minimal decline from 5.9% to 5.8% in the first quarter. Orr noted increased costs in rents, insurance, and taxes, attributing persistent inflation to population growth outpacing housing construction. He cautioned that continued high inflation could entrench expectations, leading to a vicious cycle, and urged price setters to stabilize prices to mitigate labor market impacts, per BBG.
  • Option expiries:0.6175 (NZD479.4m), 0.6125 (NZD438.8m) 23rd NY Cut while notable upcoming strikes are 0.5915 (NZD434m May 24), 0.6100 (NZD354.5m May 24)
  • Looking ahead: Retail Sales Ex Inflation at 08:45 AEST
292 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.

The Kiwi finished Tuesday's session up 0.08% at 0.6097, while the BBDXY finished a up 0.25% at 1,250.76. The more hawkish RBNZ will continue to be the focus, with little else on the local calendar today, Governor Orr spoke at the parliamentary committee earlier this morning where he mentioned CPI inflation is slowing but the decline “is being being tempered by parts of the economy that I would say are less sensitive to interest rates”.

  • The NZD/USD hit a high of 0.6152 post RBNZ on Tuesday, but was unable to hold onto those gains, slipping throughout the day on higher US yields and slightly weaker equities. The release of FOMC minutes caused a rally in the USD, which saw the pair then make lows of 0.6083, we recovered a touch heading into the close to close up 0.08% for the session.
  • Key levels to watch: Initial resistance of 0.6152 (May 22nd highs) above here we target the 0.6200/20 (round number/ March 8 high), while initial support holds at 0.6071 (200-day EMA).
  • The US-NZ 2y is 10bp lower at -18bps
  • RBNZ Governor Adrian Orr, speaking to a parliament select committee, highlighted that while CPI inflation is slowing, domestic inflation remains high and less responsive to interest rates, with minimal decline from 5.9% to 5.8% in the first quarter. Orr noted increased costs in rents, insurance, and taxes, attributing persistent inflation to population growth outpacing housing construction. He cautioned that continued high inflation could entrench expectations, leading to a vicious cycle, and urged price setters to stabilize prices to mitigate labor market impacts, per BBG.
  • Option expiries:0.6175 (NZD479.4m), 0.6125 (NZD438.8m) 23rd NY Cut while notable upcoming strikes are 0.5915 (NZD434m May 24), 0.6100 (NZD354.5m May 24)
  • Looking ahead: Retail Sales Ex Inflation at 08:45 AEST