Ian Dobbs

Economic Releases

Tuesday 27/04
Tentative, JPY, BOJ Outlook Report

Wednesday 28/04
8am, CAD, Bocages Gov Macklem Speaks
1:30pm, AUD, CPI q/q
Forecast 0.90%
Previous 0.90%
1:30pm, AUD, Trimmed Mean CPI q/q
Forecast 0.50%
Previous 0.40%
Tentative, All, OPEC-JMMC Meetings

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FX News

Top Stories This Week

FX Update: 

New Zealand first quarter 2021 CPI released midweek at 0.8% up on the fourth quarter 2020 and accelerated 1.5% from the same time in 2020, picking up from 1.4% in the fourth quarter y/y matching forecasts. Transport prices led the way rebounding up 1.7% from -3.7% in the fourth quarter. Meanwhile the cost of building a new house was up 1.2% or 3.5% y/y along with rental prices up 1.0% for the quarter and 2.7% annually. This gives a sign the central bank may not have the need to cut interest rates any time soon. The bank projects they will be well through 2.0% inflation by the end of 2021.    Read more

Today’s Top Stories

FX Update: 

RBNZ handed out no surprises last week when they left the policy settings in place with the official cash rate remaining unchanged at 0.25% and no changes to the large-scale bond purchases or funding for lending programs for banks. Inflation is expected to jump higher this year from the current 1.4% to well over the 2.0% target point with pressures on import prices and global supply chain disruptions and rises in shipping costs. Most banks expect the OCR to remain unchanged until 2025. I’m not sure they can accurately predict what happens in the global economies 4 years out – as we know 6 months of economic reporting in these coronavirus-fuelled times can look vastly different to forecasted predictions as we have seen. The biggest changes recently to the government’s mandate is housing and the recent changes to loan to value ratios, investment property tax, and how they will react going forward to stronger property prices.  Read more

Economic Releases

Wednesday 21/04
10:45am, NZD, CPI q/q
Forecast 0.80%
Previous 0.50%

Thursday 22/04
2:00am, CAD, BOC Monetary Policy Report
2:00am, CAD, BOC Rate Statement
3:00am, CAD, BOC Press Conference
11:45pm, EUR, Monetary Policy Statement

Friday 23/04
12:30am, EUR, ECB Press Conference
7:15pm, EUR, French Flash Services PMI
Forecast 46.6
Previous 48.2
7:30pm, EUR, German Flash Manufacturing PMI
Forecast 65.8
Previous 66.6
7:30pm, EUR, German Flash Services PMI
Forecast 51.1
Previous 51.5

What’s Moving Markets?

FX Update: 

These are strange times we live in, House prices are going through the roof and we have fresh talk of a double-dip recession.

Wednesday’s RBNZ policy meeting was overall dovish with the central bank maintaining its record low rate of 0.25% and keeping current policy in place. 

The Government Bond purchase cap of 100B NZD stays in place with the central Bank saying – it will take “considerable time and patience” for the banks goal of 2.0% inflation target and employment goal of under 4.0% (maximum sustainable) to be achieved. The central bank is expecting inflation to click above 2.0% which will be mostly driven by supply disruptions originating from the pandemic. We expect the RBNZ to leave rates on hold until well into late 2022 at the very earliest. With fourth quarter GDP coming in at a surprising -1.0% the economy is staring down the barrel of a new economic recession if first quarter 2021 prints negative as well. This data is announced on the 16th of June.  Read more

FX News

Kiwi Halts for Direction Cues

Market Overview

• Worldwide coronavirus cases surpass 133.002 million with over 2.885 million official
Deaths
• Prime Minister Jacinda Ardern announced a New Zealand- Australia travel free bubble starting from the 19th of this month
• Australia Housing Auction market is running hot with 80% of auctioned properties selling, this has only happened 5 times since 2008
• NZ Credit Card spending for March rose 2.0% over February’s -3.2% and equates for a total of 68% of NZ Retail Sales highlighted a good come back
• The Federal Reserve confirmed a rate hike is at least two years away and happy with inflation going above 2.0% for a while
• Italy will rollout a 40B EUR stimulus package with the vaccination rate in Europe set to speed up over the following few months

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Economic Releases

Monday 12/04
11am, USD, Fed Chair Powell Speaks

Tuesday 13/04
2:30am, CAD, BOC Business Outlook Survey

Wednesday 14/04
12:30am, USD, CPI m/m
Forecast: 0.50%
Previous: 0.40%
12:30am, USD, Core CPI m/m
Forecast: 0.20%
Previous: 0.10%
2pm, NZD, RBNZ Rate Statement Read more

Top Stories This Week.

  • Worldwide coronavirus cases surpass 133.002 million with over 2.885 million official deaths.

  • Prime Minister Jacinda Ardern announced a New Zealand- Australia travel free bubble yesterday starting from the 18th of this month.

  • The Global Dairy Auction Index was higher overnight to 0.3% from last week’s -3.8%

  • The Suez Canal which has been blocked off by a Japanese container ship has been re-floated and the Canal reopened.

  • Japan’s PM Suga says a snap election before the end of September is a possibility.

  • Australian PM Morrison wants to talk with the EU about the held back vaccines after being denied 250,000 doses, Australia’s rollout goal was to vaccinate 1M people per week.

  • From today the UK will start to roll out the Moderna Covid-19 vaccine with 17M doses secured.

Economic Releases

Tuesday 06/04
3:00am, USD, Treasury Sec Yellen Speaks
4:30pm, AUD, RBA Rate Statement

Thursday 08/04
6:00am, USD, FOMC Meeting Minutes

Friday 09/04
4:00am, USD, Fed Chair Powell Speaks

Saturday 10/04
12:30am, CAD, Employment Change
Forecast 90.0K
Previous 259.2K
12:30am, CAD, Unemployment Rate
Forecast 8.00%
Previous 8.20%

This Week’s Key Topics

  • Worldwide coronavirus cases surpass 128.777 million with over 2.814 million official deaths
  • BNP expects global growth to increase from 5.6% to 6.1% this year, as vaccinations support GDP forecasts
  • Fourth quarter US GDP predictions look to be “pie in the sky” talk from the IHS at the moment. January’s forecast of 4% for the fourth quarter has been adjusted to 6.3% after a 1.9T economic relief package and over 100M coronavirus vaccines administered. if this updated prediction comes true this would mark the fastest fourth quarter – fourth quarter jump since 1983, sure the relief package and possibly more relief in the pipeline has and will create more growth- but really 6.3% more?
  • Archegos Capital or should I say Bill Hwang is behind the massive selling of a handful of stocks including ViacomCBS. He has been forced to sell out of his long 15-20B dollar position, making the liquidation one of the largest in history.  Hwang and his company Archegos Capital Management is now at the centre of one of the world’s biggest margin calls after Hwang has been trading at dangerously risky margin levels. After many of his stocks were sold by major banks the stock prices had plummeted in recent days.
  • The Suez Canal which has been blocked off by a Japanese container ship has been re floated and the Canal reopened 
  • Japan’s Kuroda has been on the wires talking up Japan’s economy saying it’s close to bottoming out.
  • A former RBA board member has publicly said he expects the AUD/USD to trade to 0.8000 in the coming weeks/months which indicates more bond buying for quite some time.

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