The Australian Financial Review’s Post

Trading volatility: AUD/NZD on RBNZ rate decision Wednesday 28 February brings the Kiwi rate decision. The central bank is expected to leave rates on hold at 5.5% for a fifth straight meeting, but at its last decision, on November 29th, the RBNZ surprised markets by signalling a willingness to raise rates further if necessary. It indicated that stronger-than-expected demand and wage growth were possible factors that could stall progress on taming inflation.

The Reserve Bank of New Zealand is set to update the market on its latest rate decision today early in the APAC session and traders are expecting them to keep rates elevated at 5.50%. This is in keeping with other major central banks in recent weeks and in line with them, the board is also expected to keep forward guidance skewed to the hawkish side of things as they wait for high rates to have their impact on the economy. The Kiwi dollar is trading close to yearly lows and given the strength of the greenback and the likely positioning of the central bank, the risk appears to be to the downside. A break through recent lows would swiftly challenge the yearly lows which could then open the way for moves down to levels not seen since 2022. More hawkish rhetoric would see the flightless bird bounce back into recent ranges, with bulls really needing a change in US dollar sentiment for that move to have much longevity.   Resistance 2: 0.6120 Resistance 1 : 0.6050   Support 1: 0.5885 Support 2 0.5857

Trade the Kiwi on the RBNZ Rate Announcement   The Reserve Bank of New Zealand can often be a bit of an outlier in the central bank world and today’s rate announcement has the propensity to throw the cat amongst the pigeons. With most other major central banks looking at their first cut in a fresh cycle, the RBNZ is looking to tackle inflation that is remaining incredibly sticky up at 4.7%. Governor Orr has recently advised markets that the bank still has to deal with inflation and although most economists are pricing in a hold, there is still the chance that they could surprise hike which should see some big moves in the Kiwi. Like most of the majors, the kiwi has been trading in relatively quiet ranges recently but that could change later today. Short term resistance is not sitting just above 62 cents and a hike would surely see the pair power through that level with strong hawkish rhetoric also likely to see that level challenged. Short term support is around the 0.6150 level with a stronger level further south around 0.6085.   Resistance 2 : 0.6220 – February High Resistance 1 : 0.6205 – Trendline Resistance    Support 1 : 0.6150 – Short Term Trendline Support Support 2 : 0.6085 – Long Term Trendline Support    

Trading volatility: AUD/USD around RBA rates With inflation remining a concern, on Tuesday 6 February the Reserve Bank of Australia (RBA) will decide on interest rates. With the recently released trimmed mean CPI showing a drop it remains a concern so it will be interesting to see what the central bank say about the outlook for rates. Markets re expecting Aussie rates to stay on hold, but could the rhetoric accompanying the rate decision steer the trade around AUD/USD? IGTV’s Jeremy Naylor looks at the risks.

The Central Bank ‘synchronized swimming’ interest rate decision teams have been out in full force. The UK, US and Europe all in unison - rates on hold but alert and decisive to hike again if inflation starts to regroup and go again. An important part of their analysis is based on the power of interest rate lag and its cooling effect which realistically is part judgement and part luck. Consensus and synchronisation are concerning, and we should remind ourselves that not all inflations are created the same and neither are individual economies. Through this lens, the US are better positioned with Europe and the UK lagging behind as they are hampered by anaemic economic growth. In the UK’s case, it also has to deal with a virulent variation of inflation. These are challenging times for the Bank of England - made even more difficult by a highly stressed UK consumer which is where the recession is.

📢 Consumer Price Index (May 2024) May brought cooler than expected consumer inflation, due in large part to easing motor vehicle insurance costs. This follows better than expected readings in April as the annual Headline and Core readings both took important steps lower. How will the Fed see this progress as it ponders monetary policy and rate cuts this year? We'll learn more after their press conference today. The European Central Bank and the Bank of Canada have already started to cut interest rates. A coordinated effort with our Federal Reserve could be in view. #cpi #inflation #mortgagemarketnews #mortgageintheknow

The European Central Bank (ECB) cut interest rates by 25 basis points on 6 June, reflecting their forecast of falling inflation. Their reasoning: "By adjusting interest rates when inflation is too high or too low, we give businesses, workers and investors confidence that inflation will be at our 2% over the medium term. This commitment – backed up by action – helps anchor expectations that price stability will be maintained. It is also a reason why we can safely cut interest rates now."   What does this mean for the UK? The UK economy is influenced by Europe and the US, and both regions are experiencing similar inflation trends. Is the Bank of England (BoE) poised to cut the base rate? We'll see - their next meeting is scheduled later this week on 20th June..... #ruralmortgages #ruralproperty #businessloans #interestrates # ECB #BoE #economicoutlook 

The Bank of England increased its main deposit rate by 25 bps to 5.25%, emphasizing that further hikes may be needed if inflationary pressures persist. The European Central Bank similarly raised rates by 25 bps, taking its deposit rate to 3.75% — the highest level since the turn of the millennium. As recession risks grow and inflation eases, there was discussion to keep rates on hold in September. #bankofengland #europeancentralbank #interestrates #ratehikes #monetarypolicy #inflation

ECB raises interest rates to record high of 3.75% in the eurozone, the 9th consecutive hike, aiming to control stubborn inflation. The US central bank also raised rates to a 22-year high. UK inflation falls to 7.9%, but Bank of England expected to raise rates to 5.25%. #InterestRates #Inflation #EurozoneEconomy

https://lnkd.in/gWWUKg35 Lagarde refused to repeat previous terms like “more ground to cover” and “we are not done, yet”, and the statement heard in the lead-up to today’s meeting was that stopping rate hikes too early was riskier than hiking too far. Lagarde said, “The September meeting will be deliberately data-dependent”. A somehow unfortunate term. Every single central bank meeting of any central bank should always be data-dependent. Let’s hope the ECB will drop this description and instead say that “all options are on the table”, even if for the time being Lagarde has explicitly excluded a rate cut. #ECB #EURUSD #lagarde #interestrates #germany #France #Brussels