Worldwide coronavirus cases surpass 167.979 million with over 3.486 million official deaths.
We expect no change to the RBNZ review this week (Wednesday 2pm NZT) with consensus that the central bank will keep rates on hold. The focus on the statement could be interesting with consensus that the RBNZ may keep a dovish tone despite better than expected recent economic performance.
NZ Retail Sales for the March quarter rose 2.5% post a 2.7% drop in the December quarter. 10 of the 16 regions showed higher sales values as the country slowly recovers from the pandemic.
French and German banks were closed Monday in observance of Whit Monday creating thin action in European markets and currencies.
The New Zealand Dollar has been the weakest currency of its 7 peers over the past week with the Canadian Dollar the strongest.
The RBA lag behind New Zealand, Canada, the UK and the US when it comes to inflation. The RBA is solely focusing on getting inflation back to its target range of 2 -3% of which they forecast won’t happen before 2024 at the earliest. We see this as the fundamental and perhaps only reason why the NZD continues to outperform the Australian Dollar.
Iron ore prices came off recent highs as China ramps up their crack down on the souring commodity. On the Dalian Commodity Exchange (Chinese futures exchange) price dropped 9% last week. The Australian Dollar is weaker off the back of the move.
The Japanese state of emergency has been extended beyond 31 May – surely this puts the Olympic Games in jeopardy.
More than 60 million people in the UK have had the coronavirus injection now with 22 million having both doses.
Major Announcements last week:
Australian Unemployment Rate drops to 5.5% from 5.6%
Australian Retail Sales in April rose by 1.1% from 0.5% predicted
UK Retails Sales published at 9.2% after 4.5% was expected in April
The number of individuals filing for unemployment in the US over the past week dropped to 444k from 473k in March