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  • richard evans

NZD up as RBNZ raise rates, now see peak at 5.5%

Good morning

Well quite a shock in the world cup yesterday as Saudi Arabia came from behind to beat Argentina with a spirited performance. Argentina did have the ball in the net four times, three ruled out for offside. You’d have thought players would have got better at judging the offside line now we have VAR. Morocco v Croatia is the early match today, while Germany, Spain and Belgium all appear later against Japan, Costa Rica and Canada respectively.

I was out and about again for much of yesterday but don’t seem to have missed a huge amount. Majors are all a smidge higher against USD, with EURUSD at 1.0330 and GBPUSD 1.1880, leaving GBPEUR a touch lower at 1.1500.

RBNZ did raise rates 75bps as expected and raised their forecast for peak rates to 5.5% from 4.1%. They also lifted their inflation forecast to 7.5% from 6.4% and reduced their 2023 GDP forecast to -0.5% from 0.8%. NZD moved higher on the announcement, reaching just short of 0.6200 and has held most of those gains, now 0.6180. AUDNZD traded below 1.0800 and now sits 1.0765, a new low since March.

BOCs Rogers yesterday said that higher rates are starting to have an impact on the Canadian economy and warns of the risks to financial stability, although believes the economy will be able to weather the storm. Rogers speaks again today, this time with Macklem. USDCAD a touch lower than yesterday, now 1.3380 more on the back of general USD weakness.

We will get news from the courts this morning as to whether Scotland can hold another independence referendum with the consent of the UK government. Sturgeon is set on independence and even if there was another referendum, and she lost, she wouldn’t give up her cause, just as we have seen after the first referendum. Regardless of the decision today this is not going away and there will be plenty of political battles over this in the coming months.

Plenty of US data out this afternoon, then later we have the FOMC minutes which are set to confirm the slower pace of rate rises but an eventual higher peak. Not long after that the US will move off to enjoy their Thanksgiving holidays on Thursday and the standard day off on Friday which should lead to quiet markets into the end of the week.

- 09.00 EU S&P manufacturing, services PMIs

- 09.30 UK S&P manufacturing, services PMIs

- 13.30 US durable goods, initial jobless claims

- 14.45 US S&P manufacturing, services PMIs

- 15.00 US Michigan sentiment survey, new home sales

- 15.30 BoEs Pill speaks

- 19.00 FOMC minutes

- 21.30 BoCs Macklem, Rogers speak

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