ForexLive Asia FX news wrap: Hot New Zealand inflation boosts RBNZ rate hike expectations and the NZD
Forex news for Asia trading on Friday 16 July 2021
- Westpac forecast 3 rate hikes from the RBNZ by the end of this year
- RBNZ's core inflation measure for Q2 2.2% (prior 2.0%)
- BOJ statement - No change to main policy settings
- Authorities in China will require property developers to disclose commercial paper debt every month
- PM Trudeau: May accept fully vaccinated Americans into Canada in mid-August
- USD/JPY on approach to 110 ahead of the BOJ statement
- ANZ on the RBNZ cash rate hike cycle ahead, on track for 1.75% by the end of 2022
- US coronavirus - Los Angeles compulsory indoor masks start again this weekend
- PBOC sets USD/ CNY central rate at 6.4705 (vs. yesterday at 6.4640)
- Australia coronavirus - NSW state (Sydney capital city) hits 97 new cases again today
- Singapore non oil exports (NODX) +6% m/m (expected +2.1%)
- Australia coronavirus lockdowns - HSBC expect Australia's economy to stall
- Another New Zealand bank forecasts an August rate hike from the RBNZ
- ICYMI - JP Morgan CEO Dimon sees H2 growth in the US stronger than its ever been. Wary of rate rises.
- Morgan Stanley remain bearish Swiss franc, looking for a higher USD/CHF
- Goldman Sachs London office will require staff to wear masks in the building
- NZD/USD higher after the scorchingly hot inflation data, 3.3% y/y
- NZ CPI Q2 2021 1.3% q/q (vs. expected 0.8%) and 3.3% y/y (vs. expected 2.8%)
- New Zealand - BusinessNZ manufacturing PMI for June: 60.7 (prior 58.6)
- The US is to sanction Chinese officials over Hong Kong
- ICYMI - TSMC sees auto semi chip shortage abating this quarter
- Trade ideas thread - Friday 16 July 2021
- US Treas Sec Yellen says she thinks there are several more months of rapid inflation ahead
Once again eyes turned to New Zealand, today for the release of Q2 inflation data. The headline CPI came in hot, at 3.3% y/y and 1.3% for the quarter alone. Expectations and market pricing for a near-term cash rate hike from the Reserve Bank of New Zealand rose; while last week the consensus shifted to a hike in November this year this week it has moved to the next meeting, on 18 August. The data today further cemented this view. As an aside, ahead of the mid-August meeting there is official employment data due from NZ on August 4.
NZD/USD was marked higher immediately and has tracked pretty much 0.6990-0.7020 in the hours following the data release. Check out the bullets above for some of the very aggressive rate hike calls from ANZ and Westpac.
AUD/USD failed to follow along with the kiwi, AUD/NZD sliding further.
USD/JPY has been a bit of a mover, trading from lows under 109.80 to above 110. As I post we have had the, as expected, BOJ policy statement and downgrade for economic growth, and an outline of the Bank's climate program:
- main policy planks are all unchanged
- the near term GDP growth projection has been cut but further out maintained, in line with the Bank's expected slow recovery for the economy
- lending for climate-change addressing reasons to be set at 0% for a period of one-year with no limit on the number of rollovers
USD/JPY is barely changed in the wake of the meeting's results.Australian dollar against the New Zealand dollar this week. Sad.