Key Points:
NZ National House prices dropped 1.7% between March and April, y/y is +8.8%
NZ April manufacturing PMI 51.2 vs 53.8 previously
Markets are now pricing in a cash rate peak of 3.85% down from 4.25% based on recent inflation expectations. The next RBNZ meeting should see a rise of 0.50% not the 0.75% we were expecting
Fed chair Powell said allowing higher inflation would mean a much steeper downturn – he has endorsed an additional 50 points rise at the June and July meetings
US Yields are coming down as growth fears increase, this is based on the markets pricing a less hawkish track
Risk appetite has been shaky of late due to many reasons -one of these is the prospect of a recession in China due to its zero covid policy
UK prelim GDP for the first quarter prints at 0.8% slightly lower than the 1.0% expected
North Korea has announced lockdowns on the country’s first covid case
The Japanese Yen (JPY) is the strongest currency this week with the Australian Dollar (AUD) the weakest.
Gas Lines through Ukraine remain disrupted