- RBNZ Press Conference with Governor Orr coming up at 0300 GMT - live link
- NZ cash rate 2%, going to nearly 4%. AUD cash rate 0.35%. Say goodbye to AUD/NZD
- NZD/USD surges after the RBNZ raises rates and outlook for rates higher
- Reserve Bank of New Zealand cash rate hike of 50bps, as expected
- Have the US and South Korea fired missiles at North Korean missile launches?
- Australian Q1 2022 Construction work done -0.9% q/q (vs. expected +1.0%)
- PBOC sets USD/ CNY mid-point today at 6.6550 (vs. estimate at 6.6543)
- ICYMI - PBOC has met with major finance groups to urge more support for the economy
- ICYMI - US Seizes Iranian crude shipment from Russian Tanker in Greece
- Chinese diplomat on joint air force operations with Russia
- China coronavirus - Tianjin has lockdown its city centre
- More from RBA's Ellis - further rate hikes are on the way
- Singapore Q1 economic growth 0.7% q/q (expected 0.8%) and 3.7% y/y (expected 3.7%)
- Japanese government economy report - raises its assessment on employment
- RBA's Ellis says Australian construction delays widespread, bulding supplies short
- ICYMI - Fed's Bostic flagged a potential rate hike pause in September (post-Jackson Hole)
- ICYMI - Guggenheim's Minerd says a Fed funds rate above 1.75% is 'too restrictive'
- MUFG on EUR/USD, have a neutral bias & see a range of 1.03/1.11
- North Korea has fired a total of 3 ballistic missiles this morning (Asia time)
- ICYMI - India's Oil Minister said a crude oil price of $110 a barrel was not sustainable
- US President Biden will speak about the Texas elementary school shooting on Tuesday night
- Goldman Sachs likes short USD/JPY exposure
- Forexlive Americas FX news wrap: New home sales starts to show price and rate pressures
- North Korea fires ballistic missile towards the Sea of Japan
- Trade ideas thread - Wednesday 25 May 2022
- Nasdaq snapped lower. Dow closes higher
The Reserve Bank of New Zealand raised the cash rate by 50bps at its monetary policy meeting. This takes the cash rate from 1.5% to 2.0%. The rate hike was widely, basically unanimously, expected. Markets were pricing in the peak for the cash rate to somewhere circa 3.5% but the RBNZ surprised by ratcheting up the expected peak to 3.95% in H2 of 2023 (3.25% by the end of 2022). This was a hawkish surprise. NZD/USD jumped to circa 0.6500 from around 0.6430 heading into the announcement. We are now awaiting the press conference from Reserve Bank of New Zealand Governor Orr.
In data today we had Australian ‘construction work done’ from Q1 of 2022. This feeds into the GDP data for the quarter. It disappointed at -0.9% q/q vs. the +1.0% consensus median estimate. While the Omicron wave and rain & flooding were expected to keep construction activity restrained, the actual result was a big disappointment. On the brighter side Q4 2021 (ancient history) was revised to +0.6% q/q from -0.4%.
News from the region included North Korea firing off 3 ballistic missile tests. The US and South Korea responded by firing tests of their own, 2 missiles into the East Sea intended to show the readiness of their own "rapid strike capabilities".
It was a mixed session for FX rates. EUR/USD and AUD/USD are net lower on the session. USD/CAD and GBP/USD are barely changed. USD/JPY is little changed also while USD/CHF is up just a little. NZD, as noted above, was the mover,