The New Zealand dollar dropped on the session, a notable move given subdued changes elsewhere. The smoking gun for the drop appeared to be the report from Westpac slashing their expectation for Q4 CPI in half to 3%. If inflation does fall away rapidly it means the Reserve Bank of New Zealand should not need to hold rates ‘higher for longer” and thus undercuts support for the NZD, at the margin.

From Japan today we had the Q4 Tankan report, a survey of thousands of Japanese firms of all sizes, across a wide range of industries conducted by the Bank of Japan. It showed the Japanese economy continues to improve, albeit slowly. It also showed that business inflation expectations remain above 2% (the BOJ target) out for five years!

The USD gained slightly: EUR, GBP, CAD, AUD all down a few points on the session.

As the headline to the post says, markets are mainly now waiting for the Federal Open Market Committee (FOMC) and Powell.

The oil price remained heavy, a draft global statement at COP28 has called for the world to transition away from fossil fuels by 2050.

nzd chart wrap 13 December 2023