RBNZ kept rates unchanged at 1.75%, and said it expected inflation to rise at a gradual pace. The Reserve bank of New Zealand also went on to say that a weaker kiwi is needed for more balanced growth. The NZD is weaker against both the euro and the USD this morning, after some initial strengthening following the communication.
Geo-political tensions remain, however the markets reaction to them somewhat eased. The CHF and the JPY that initially gained on the back of their safe-haven status are today performing differently. The CHF has traced back some of it gains and the JPY, despite remaining in positive territory this morning is close to flat on some of the major pairs.
Sentiment, as gauged by the performances of the major equity indices in Asia, still remained sour this morning. We see the major equity indices there have headed south and are in negative territory.
Today’s economic docket envisages a string of economic data, mostly from the UK and the US. With the Manufacturing and Construction figures coming out of the UK together with the Trade Balance figures. The US will report its latest PPI numbers alongside the customary weekly jobless claims.
