The RBNZ went and did it
In theory, a central bank lowering rates by 50 basis points is good news. It means cheaper money for everyone.
Yet somehow the RBNZ lowering rates by a half-point feels ominous, especially after a sensational employment report the day before.
What's especially puzzling is the language in the statement:
Employment is around its maximum sustainable level, while inflation remains within our target range but below the 2 percent mid-point. Recent data recording improved employment and wage growth is welcome.
Translation: Everything is great, but we're hitting the panic button.
They go onto highlight growth headwinds and 'heightened uncertainty' but it all strikes the wrong cord with me. Combine it with the surprise move from Thailand's central bank and India's odd 35 bps cut and you start to get the sense that something is rotten in the state of the world economy.
Now it's all kicking off with gold a hiccup away from $1500 and USD/JPY on the defensive.
