The RBNZ flexed it's muscles this morning. While the press conference is next up, geopolitical risk continues to be the main area of focus.
It was a quieter Asian session on the economic calendar this morning.
Economic data through the session included Australia’s June home loan figures. While the stats were on the lighter side, the RBNZ delivered its August monetary policy decision this morning.
According to the ABS, new home loans fell by 0.9% in June, month on month, which was worse than a forecasted 0.6% rise. New home loans were flat in May.
The Aussie Dollar moved from $0.67770 to $0.67780 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.16% to $0.6750.
The RBNZ cut interest rates by 50 basis points to 1.00%. The markets had anticipated a 25 basis point rate cut. Salient points from the rate statement included:
There was nothing hawkish monetary policy statement, with downward revisions supporting the RBNZ’s larger than an anticipated rate cut.
The Kiwi Dollar moved from $0.65452 to $0.64359 upon release of the rate statement and monetary policy statement. At the time of writing, the Kiwi Dollar was down by 1.10% to $0.6453. Next up, the RBNZ press conference…
At the time of writing, the Japanese Yen was up by 0.34% to ¥106.11 against the U.S Dollar
In the Asian equity markets, it was a mixed bag at the time of writing. The CSI300 and ASX200 found support early on, rising by 0.535 and by 0.12% respectively. The Nikkei and Hang Seng were down by 0.46% and by 0.14% respectively.
In spite of the PBoC intervention on Tuesday, the Yuan continued to hold at CNY7.00 levels early on in the session. At the time of writing, the Yuan was down by 0.17% to CNY7.0315.
It’s another relatively quiet day ahead on the economic calendar. Key stats due out of the Eurozone are limited to Germany’s June industrial production figures.
We could see the EUR under pressure should industrial production see worse than projected numbers.
Outside of the stats, geopolitical risk will continue to have an influence on the day.
At the time of writing, the EUR was up by 0.12% to $1.1212.
It’s a relatively quiet day ahead on the data front, with economic data due out of the UK limited to July house price figures. We would expect the stats to have a muted impact on the Pound as the focus continues to be on Brexit.
Expect the Pound to be particularly sensitive to any Brexit chatter. For now, the baseline story is of a no-deal Brexit. Any talk of averting a no-deal departure would provide much-needed support for Sterling.
At the time of writing, the Pound was up by 0.06% to $1.2178.
It’s a quiet day for the Greenback, with no key stats due out of the U.S.
The lack of stats will leave the market focus on any chatter from the Oval Office. Any further retaliatory measures would place pressure on the Dollar.
At the time of writing, the Dollar Spot Index was down by 0.15% to 97.488.
It’s a relatively quiet day ahead on the economic calendar. July’s Ivey PMI is due out later today, which will provide the Loonie with direction.
We can also expect crude oil inventory numbers to also provide direction, with the weekly EIA numbers due out later in the session.
The Loonie was up by 0.02% at C$1.3279, against the U.S Dollar, at the time of writing.
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.