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With
Chinese markets closed now for the long Lunar New Year holidays it
was over to New Zealand today for some fireworks.
ANZ
New Zealand dropped a huge out-of-consensus call into the mix, forecasting a
Reserve Bank of New Zealand rate hike at the Bank’s next policy
meeting on February 28, and also for another at the following meeting
on April 10. The current RBNZ Official Cash Rate (OCR) is 5.5%, the
two 25bp rate hikes that ANZ expect would take it to 6%. NZD/USD
jumped higher, from around 0.6095 to be sitting close to its session
high as I post
From
across the ditch (the Tasman Sea that separates New Zealand from
Australia) we had Reserve Bank of Australia Governor Bullock speaking
in parliament, before the House of Representatives Standing Committee
on Economics. Bullock didn’t add anything different to her comments
earlier in the week after the RBA’s first policy meeting of the
year. The main message was that while the inflation rate has been
coming lower there
is
still
some way to go to meet the midpoint of the central bank’s target
range of 2-3%. Bullock
said that the Bank
has not ruled out another rise in interest rates, should
that be necessary. She highlighted:
- “while
we don’t necessarily need services inflation to be at the midpoint
of the 2–3 per cent range to meet our target, we do need it to be
quite a bit lower than it currently is.”
I
think its very safe to say there is no prospect of an imminent cash
rate cut from the Bank.
Also
speaking in parliament (Japan’s) today was Bank of Japan Governor
Ueda. Ueda backed up the comments from his Deputy Uchida on Thursday
who said that financial conditions in Japan will remain easy even
after the BOJ puts an end to its negative rate policy.
While
the New Zealand dollar rose during the session elsewhere for other
major-trade FX its was mainly very quiet and tightly range-bound.
Read More: ForexLive Asia-Pacific FX news wrap: NZD jumps on rate hike forecast