Global Markets:
- Asian stock markets: Nikkei up 1.35 %, Shanghai Composite fell 1.10 %, Hang Seng rallied 0.80 %, ASX 200 declined 0.15 %
- Commodities: Gold at $1250.90 (-0.50 %), Silver at $15.30 (-0.50 %), WTI Oil at $38.20 (-0.15 %), Brent Oil at $40.90 (-0.40 %)
- Rates: US 10 year yield at 1.88, UK 10 year yield at 1.48, German 10 year yield at 0.24
News & Data:
- China CPI (YoY) Feb: 2.3% (exp 1.8% prev 1.8%)
- China PPI (YoY) Feb: – 4.9% (exp -4.9% prev -5.3%)
- Japan PPI (MoM) Feb: -0.2% (exp -0.3% prev -0.9%)
- Japan PPI (YoY) Feb: -3.4% (exp -3.4% prev -3.1%)
- Australia Consumer Inflation Expectations (Mar): 3.4% (prev 3.6%)
- UK BRICS House Price Balance (Feb): 50% (exp 50% prev rev 48%)
- Bank Of Korea Keeps Benchmark Repo Rate On Hold At 1.50% As Expected
- PBoC Fixes Yuan At 6.5127 (prev 6.5106)
- Japan PM Adviser Honda: BoJ Probably Won't Ease Next Week, When Does Ease Should Be Combination Of Asset Buying & Rate Cut — BBG
- BoJ's Iwata: Japan's Inflation Trend Is Improving — BBG
Reserve Bank of New Zealand:
- RBNZ cuts OCR by 25bps to 2.25%
- RBNZ: Further easing may be required
- RBNZ: Inflation is expected to move higher over 2016
- RBNZ: Policy will continue to be accommodative
- RBNZ: Further NZD depreciation is appropriate
- RBNZ: Sees 2016 Q1 annual inflation at 0.4% vs 1.2% prior
- RBNZ: Sees Q4 2016 annual inflation at 1.1% vs 1.6% prior
- RBNZ Assumes Global Dairy Prices Will Rise From Q416 — BBG
- RBNZ Governor Wheeler: Structural Factors Affecting Global Inflation
- Wheeler: Says NZD is 5% higher than projected in December
- Wheeler: House price inflation in Auckland 'coming off' but it's still early days
- Wheeler: Long-term inflation expectations well anchored
- Wheeler: Expectations had begun to adjust downward and that was a concern
- Wheeler: Rate projections build in two cuts
- Wheeler: If a cut or more occurs, it will be based on the data
Markets Update:
The Reserve Bank of New Zealand surprised markets last night when it cut its OCR by 0.25 % to 2.25 %. The New Zealand Dollar fell sharply, with NZD/USD tumbling from 0.6810 to 0.6650 and later extending losses to 0.6620. AUD/NZD rallied from 1.1060 to 1.1280, while NZD/JPY declined from 77.00 to 75.00. The RBNZ said in their statement that further easing may be required and that further NZD depreciation would be appropriate. The outlook for the NZD is now negative and any rallies in NZD/USD are likely to attract decent selling interest.
AUD/USD fell in sympathy with the NZD, from 0.7530 to a low of 0.7460 in Asia, and support is seen at 0.7420 and then 0.7380. The Canadian Dollar rallied after the BoC remained on hold and did not deliver any dovish messages. USD/CAD declined from 1.3420 to 1.3240 yesterday. In Asia, the pair bounced slightly, rising to 1.3280.
Upcoming Events:
- 07:00 GMT – German Trade Balance
- 12:45 GMT – ECB Rate Decision
- 13:30 GMT – ECB Press Conference
- 13:30 GMT – US Initial Jobless Claims
- 21:15 GMT – BoC Governor Poloz speaks
- 21:45 GMT – New Zealand Business NZ PMI
