Forex news for Asia trading on Tuesday 6 July 2021
New Zealand posts, strong business survey and subsequent RBNZ rate hike forecasts (and a little more):- BNZ now forecast the REBNZ to hike its cash rate in November 2021
- Heads up for NZD traders - the next RBNZ Monetary Policy Review is July 14
- More on NZ banks calling RBNZ rate hikes sooner (ASB forecasting November this year)
- More RBNZ rate hike speculation - sooner rather than later
- ANZ in New Zealand are also calling for RBNZ rate hikes sooner
- NZD/USD on the rise after the QSBO and ASB's RBNZ cash rate hike call
- NZ bank ASB forecasts the RBNZ hiking its cash rate in November this year
- New Zealand QSBO for Q2 2021, business confidence headline 7% (vs. -13% prior)
- NZD traders - heads up for the GDT dairy auction coming up Tuesday London time
Market pricing:
Other:
- Elon Musk tweets Buffett advice to 'find coins'
- Comments from South Korea on forex market uncertainty
- Latest coronavirus numbers from Australia's largest city - line ball decision on lockdown extension
- PBOC sets USD/ CNY mid-point today at 6.4613 (vs. yesterday at 6.4695)
- Australian media reports the F1 Grand Prix is expected to be cancelled again this year
- Reports Bitcoin.org is being hit with an “absolutely massive” distributed denial of service (DDoS) attack
- Hong Kong PMI report - shortage of raw materials, shipping delays, labour constraints, inflation pressure
- Japan is set to extend its coronavirus quasi-state of emergency in Tokyo
- Japan wages data for May, nominal +1.9% y/y, real +2.0% y/y
- Japan Household spending for May +11.6% y/y (expected 10.9%, prior 13.0%)
- Australia weekly ANZ-Roy Morgan Consumer Confidence: 107.8 (vs. prior 112.2)
- ICYMI - UK PM Johnson confirms July 19 for COVID-19 restrictions relaxation
- Australia coronavirus - The lockdown in Sydney appears to have had only a small impact on consumer spending
- ICYMI - The Bank of Canada business outlook survey has hit its highest level ever
- Trade ideas thread - Tuesday 6 July 2021
- The US is urging OPEC+ to find a compromise deal on increasing oil output
The New Zealand dollar was a mover on the session here, dragging the Australian dollar along behind. The NZD began its rise on the publication of the NZIER Quarterly Survey of Business Opinion (QSBO), which is a closely watched NZ economic indicator. Today's release was the survey results for Q2 of 2021 and it painted a picture of a strong economy with rising inflation pressures.
Soon after its release, with NZD/USD up a few tics, a New Zealand bank, ASB, revised its RBNZ cash rate hike projection, analysts at the bank saying they now expect the RBNZ to hike at the November meeting this year. ANZ in NZ followed quickly afterwards, in a research note analysts reiterated they expected the central bank to raise the cash rate "sooner rather than later" but not yet putting a firm date on their forecast. NZD/USD moved higher, to above 0.7060 where it found a top and slinked along sideways for a few hours.
BNZ was the next cab off the rank, also publishing a forecast for a November rate hike. This sent NZD/USD to a fresh session high above 0.7070 where it is as I post.
More generally, market pricing firmed up for a November hike.
Also trading higher today was oil, further responding to the news out during US time Monday (the US holiday observed for July 4 Independence Day was Monday July 5 with US markets closed) that the OPEC+ meeting had been abandoned after no agreement could be reached. More on this in the bullets above but the summary story is an output increase of 400K barrels a month in August and each month after through to December (inclusive) was more or less agreed to but the United Arab Emirates refused to sign on as they are seeking a great share of output. The country has invested to boost output and is ready to pump more oil but are unhappy with their current base allocation and want further.
Still ahead ... The Reserve Bank of Australia monetary policy statement will come at 0430 GMT and Governor Lowe speaking following at 0600 GMT.
- RBA monetary policy meeting Tuesday 6 July 2021 - preview
- RBA monetary policy meeting July 6 - preview
- How the RBA could push back against markets bringing forward calls for a rate hike
- TD flag a risk of AUD/USD dropping to circa 0.7245
NZD higher:
