Another confusing RBNZ policy statement where they managed to upgrade their growth outlook, despite recent weaker activity indicators, and yet downgrade their inflation forecasts, and end up with no change in their rates outlook. They see the higher exchange rate since May has dampening their inflation outlook. And have come to see their fellow Kiwis […]
The RBA has gone out of its way to damp down expectations that it will hike rates for some time; pointing to slack in the labour market, a higher exchange rate, retail competition intensifying as Amazon enters the Australia market, a subdued outlook for business investment, risk in the housing market and from household debt, […]
The New Zealand employment data released on Tuesday moved the needle in favour of a strong AUD/NZD. Perhaps more significant is evidence that construction and the housing market in New Zealand appear to be peaking, while in Australia construction appears to be picking up, led by stronger non-residential building consents. A lift in the non-residential […]
Our quick take on the RBA policy statement. Recent economic reports suggest that the Australian economy has gained some momentum, and the market may not be as calm as the RBA may be about higher electricity/tobacco prices and higher commodity prices. NZ labour data today may show little tightening or wage pressure. AUD/NZD may continue […]
The RBA Governor’s speech last week suggested that the RBA is very comfortable with the current policy settings and a hike is unlikely for several months, arguably not until well into next year. On the other hand, the minutes from the 4 July policy meeting, released on 18 July, gave a number of hints that […]
The USD has fallen further in recent weeks as the Fed indicated it is more concerned about low inflation outcomes. The shift in focus to QE balance sheet run down also points to a slower and more uncertain path of Fed rate rises over the coming year. The market still sees a 50% chance that […]
The USD has taken a decent beating this year. On broad indices, it was at a high in around 15-years in January, and in the space of six months, accelerating in the last three, it is down around 8% to be testing the low side of its range for the last two-and a half years. […]
Australian Employment growth has surged in the last three months to the fastest rate since 2004, and the unemployment rate has fallen to recent lows. Forward-looking employment indicators have accelerated in recent months, and the labour report on Thursday may again beat albeit somewhat elevated expectations. The market is still being distracted by the tail […]
The Fed is moving into a new phase of its policy normalization where it begins its QE portfolio run-down. Even though the Fed says it hopes this will run on autopilot in the background, it is a form of policy tightening, and further rate hikes will be done more cautiously. In fact, the timing of […]
CAD continues to confound with a further sharp rally after an essentially anticipated rate hike. There was nothing too surprising in the Bank of Canada’s presentation. The outlook has improved as heralded by recent speeches, and the Bank brought forward the closing of its output gap from the first half of 2018 to around the […]