- unemployment rate to spike in Q3-2019, necessitating RBA rate cutsRBA now lowering its expectation on the non-accelerating inflation rate of unemployment (NAIRU) to 4.5% from 5% earlier, we believe the required policy action on a rising unemployment rate will be largerhurdle to cut rates below 1% is still quite highRBA will likely require the unemployment rate to rise close to 5.5% before it cuts rates below 1%We expect this to happen in Q3, as job losses in construction accelerate
- market is mostly priced for another RBNZ rate cut in Augustplacing around a 20% chance of a move (today) - All of the respondents in the Bloomberg survey expect the RBNZ to leave rates unchanged …. would allow policymakers the opportunity of examining another 6 weeks of fresh economic data in addition to a revised set of internal forecasts ahead of the next policy meeting in August.
- The consensus expectation among analysts and the market is for an on-hold decision this afternoon. To avoid a positive reaction from the NZD, the RBNZ will need to at least signal potential for a rate cut in August.
- Chinese exporters warn their business is growing at its slowest pace in three yearsmore than a quarter of firms now believe that the trade war is a permanent fixture of relations with the US, and not just a passing feature of the Trump administration37% say trade war is having some or a very negative impact on their business
- base case scenario is global growth gradually improves in H2 of 2019recession worries recedeshould eventually lead to a gradual moderation in "fear" driven investment demand for goldEmerging market GDP growth gradually improves
- says downside risks to New Zealand's growth outlook have increased but it has policy space to respond should risks materializeNZ economic expansion is solid, but lost momentum recentlyNZ current monetary policy stance fits subdued inflation conditions
- The background to this is increasingly tense relations between China and Canada ever since the arrest of the Huawei official (and only daughter of the firm's founder), Chief Financial Officer Meng Wanzhou.
- has seen short covering supporting itexpect this to continue in the near term, providing further supportingsystematic traders using simple momentum approaches likely to buy given it broke above its 200 day MA
- before I do the long story short is all analysts surveyed by Bloomberg expect the Bank to remain on hold at a cash rate of 1.5%. However, there is non-negligible risk of a cut from today's meeting.
- The Nasdaq index has led a down day in the US stock market. The price of that index fell back below its 50 hour MA (a bearish tilt to the downside) and stayed below. The catalyst was less dovish comments from the most dovish Fed official, James Bullard (or the one who voted to cut rates at the last meeting). He said that 50 bps at the next meeting would be stretch.
- On a day with a heavy scheduled of data and a talk from the Fed chair, it was St Louis Fed President James Bullard who stole the show as the arch-dove said it wasn't time for a 50 bps cut and called instead for an 'insurance' cut, which suggests one cut rather than a series.
- The 50 hour MA did indeed transition the level support to resistance, and the price has now moved toward the 100 hour MA. That MA currently comes in at 7864.38. The low reached 7880.15 so far.
Citi Research discusses its expectations for this weekend's Xi-Trump meeting and for tonight's RBNZ June policy meeting.
G20 - "This week's focus will turn to the G20 meet between Presidents Trump and Xi. Citi's base case is for a US-China handshake but risk of tariffs remain," Citi projects.
RBNZ meeting - "Citi analysts expect RBNZ to keep the OCR unchanged at 1.50% this week but retain the option of future cuts. Dovish concerns are driven by the global outlook but domestic activity remains solid with "employment near its maximum sustainable level". The policy statement could conclude by saying "we will keep OCR expansionary for a considerable period to contribute to maximizing sustainable employment and maintaining low and stable inflation," Citi adds.
For bank trade ideas, check out eFX Plus.ForexLive
- Top 50 publishers (last 24 hours)
- Reuters Top News 399 updates
- Bloomberg 356 updates
- FXStreet News 178 updates
- zerohedge 142 updates
- ForexLive 134 updates
- MarketWatch 132 updates
- Bloomberg Markets 91 updates
- Financial Times 73 updates
- City A.M. 69 updates
- Reuters Business 63 updates
- NYT Business 54 updates
- Finextra 50 updates
- Nasdaq 39 updates
- WSJ Markets 37 updates
- FxMacro 30 updates
- Harvard Business Review 27 updates
- DailyFX 26 updates
- Businessweek 23 updates
- ReutersBreakingviews 22 updates
- FinReg Alert 22 updates
- Finance News 22 updates
- David Wessel 22 updates
- NYSE - We Are Living Tech 21 updates
- Adam Posen 20 updates
- Financial News 19 updates
- WSJ Europe 18 updates
- OGUK 18 updates
- CMC Markets UK 17 updates
- BBC Business 17 updates
- Robert Peston 15 updates
- Real Time Economics 15 updates
- RANsquawk 15 updates
- FT Economics 14 updates
- St. Louis Fed 13 updates
- New York Fed 13 updates
- Business Insider UK 13 updates
- Richmond Fed 13 updates
- ET Commodities 12 updates
- EIN Oil & Gas News 12 updates
- IEA 11 updates
- Paul Krugman 10 updates
- FT Energy 10 updates
- World Bank 10 updates
- Mohamed A. El-Erian 9 updates
- Kansas City Fed 9 updates
- Squawk Box 9 updates
- Donald J. Trump 9 updates
- FINRA 8 updates
- Atlanta Fed 8 updates
- IIF 8 updates