Nzd usd

[winner69]

The Sahm Rule at interesting point …..if US in recession what happens to nzdusd?

[beacon]

Is that good or bad if we want a higher nzd ….or it doesn’t mean much at all

If NZD trade-weighted index rises, NZD should be rising versus the currencies of its major trading partners.

[beacon]

The Sahm Rule at interesting point …..if US in recession what happens to nzdusd?

Sahm says this time may be different. "Empirical patterns are not laws of nature," Sahm told Weekend Edition Sunday. "Rules are made to be broken."
The 'R' word: Why this time might be an exception to a key recession rule : NPR (https://www.npr.org/2023/11/12/1212175542/sahm-rule-recession-unemployment-rate)

[beacon]

The Sahm Rule at interesting point …..if US in recession what happens to nzdusd?

There is increased chatter of a soft US landing and no recession
Real-time Sahm Rule Recession Indicator (SAHMREALTIME) | FRED | St. Louis Fed (stlouisfed.org) (https://fred.stlouisfed.org/series/SAHMREALTIME)

[winner69]

Central bank rhetoric lacking credibility as powerful economic headwinds emerge

https://www.ft.com/content/9e97e971-b99e-4f92-8f77-0500a4d8fd74

[beacon]

Reserve Bank chief economist Paul Conway acknowledges that financial markets aren’t yet fully buying into the[ir forecasted] scenario [Dec 2024, NZ economy growing at 1.6%, CPI 2.5%, OCR 5.75%, real returns on savings 3.25%].


Kiwibank chief economist Jarrod Kerr notes that at the moment traders are still pricing-in two interest-rate cuts late next year, much sooner than the Reserve Bank is signalling.


But Conway denies the Reserve Bank was just talking tough for effect in the forecasts it issued alongside its monetary policy statement last Wednesday, saying the bank “isn’t playing a game”. The bank’s monetary policy committee is “impatient” to get inflation back into its target band of 1% to 3% and yet there are upside risks to inflation, he says. “What we're saying in the statement is that we don't see the scope for rate cuts until into 2025. We need to be sure that inflation is not only not just ‘sort of dipping’ into the band, but is firmly anchored at that midpoint of 2%. I would say that 2.5% is not job done; our job is to get inflation back to 2%.”
https://www.thepost.co.nz/business/350124148/reserve-bank-says-serious-inflation-may-be-25-and-ocr-575-next-december

I'd rather believe RBNZ (because of their better visibility of NZ data) than a FT columnist. Looks like NZD is heading higher vs USD - much higher than 65c, as inflation has fallen (and falling) faster in US than in NZ...

[winner69]

The US labour market is still delivering workers monthly wage growth of 0.35% - higher than the 0.2% a month CPI. The Fed would not want to cut rates and see wages and inflation turn higher.

Don’t fight the Fed they say

[winner69]

Nz ….Annual net PLT immigration hit a record high in October, with the risk of a higher for longer net immigration boost that will have implications for the economic and interest rate outlook

[beacon]

Don’t fight the Fed they say

Agree, 65c NZD USD. Here we come...

Fed holds rates steady, indicates three cuts coming in 2024
https://www.cnbc.com/2023/12/13/fed-interest-rate-decision-december-2023.html

[Daytr]

Not sure about that.
NZs GDP was a shocker considering the level of inflation.
Not surprised though after both import & export numbers were down in recent months.

https://www.nzherald.co.nz/business/did-the-economy-shrink-or-grow-new-gdp-numbers-today/VIPKVULJP5DGDJSEY5NDXQ3HMI/

[beacon]

Not sure about that.
NZs GDP was a shocker considering the level of inflation.
Not surprised though after both import & export numbers were down in recent months.

https://www.nzherald.co.nz/business/did-the-economy-shrink-or-grow-new-gdp-numbers-today/VIPKVULJP5DGDJSEY5NDXQ3HMI/

You realize dot plots are now showing Fed funds rates halving in 3 years, at the minimum. See what is happening to treasuries, share markets...
I'm being very conservative at 65c NZD USD. I expect NZD USD over 70c within 3 years now, as NZ- India relationship gets going.

[winner69]

Hey beacon, potential trade with India is HUGE


Even if 35% of the population are vegetarian and every other person in India relished a lamb chop NZ would require around 57m lambs, a figure imaginable yet substantial. Let’s hope we can find a lucrative market for the entirety of the lamb carcass eh

[beacon]

Hey beacon, potential trade with India is HUGE


Even if 35% of the population are vegetarian and every other person in India relished a lamb chop NZ would require around 57m lambs, a figure imaginable yet substantial. Let’s hope we can find a lucrative market for the entirety of the lamb carcass eh

Lamb chops is just one of the hundreds of potential markets in India for NZ products and services.
Now Luxon is finally free of political horse trading, he'll get us there... We already have goodwill with India, just need more FTAs and trade.

Christopher Luxon looks to India to drag New Zealand out of its long decline - Matthew Hooton
https://www.nzherald.co.nz/business/christopher-luxon-looks-to-india-to-drag-new-zealand-out-of-its-long-decline-matthew-hooton/XFB56UFTJ5BX7AJ5LC76SWNJBM/

[beacon]

... Inflation is no longer the only game in Town.

Despite the current jawboning, Reserve Banks around the world are looking for an excuse to cut. A strong USD is hurting everyone, including I suspect the US, and refinancing interest rates are beginning to bite global borrowers harder - including in US.

Posted 17.10.23. Reached milestone 14.12.23

[Daytr]

Lamb chops is just one of the hundreds of potential markets in India for NZ products and services.
Now Luxon is finally free of political horse trading, he'll get us there... We already have goodwill with India, just need more FTAs and trade.

Christopher Luxon looks to India to drag New Zealand out of its long decline - Matthew Hooton
https://www.nzherald.co.nz/business/christopher-luxon-looks-to-india-to-drag-new-zealand-out-of-its-long-decline-matthew-hooton/XFB56UFTJ5BX7AJ5LC76SWNJBM/

Perhaps India will be different due it's size and small amount of trade currently with NZ, however there is little evidence that FTAs have increased trade substantially in the past.
This maybe due to thevfact that most of our FTAs are with countries that we already had strong trading ties with.
Has our trade increased with Singapore since an FTA was signed ?

[winner69]

Perhaps India will be different due it's size and small amount of trade currently with NZ, however there is little evidence that FTAs have increased trade substantially in the past.
This maybe due to thevfact that most of our FTAs are with countries that we already had strong trading ties with.
Has our trade increased with Singapore since an FTA was signed ?

Hey daytr …I always find this chart interesting

[beacon]

Perhaps India will be different due it's size and small amount of trade currently with NZ, however there is little evidence that FTAs have increased trade substantially in the past.
This maybe due to thevfact that most of our FTAs are with countries that we already had strong trading ties with.
Has our trade increased with Singapore since an FTA was signed ?

Don't know about Singapore FTA, but here is a glimpse of the India effect coming in play for NZ. https://www.stats.govt.nz/news/visitors-from-india-help-travel-rebound/
FDI in India is breaking records, increasing their market cap, economy, scale and all that follows when citizens feel wealthier.
International leaders are making a beeline for India, particularly US, Australia and UK, with good reason.

[beacon]

Hey daytr …I always find this chart interesting

Big reason for that is 20% fall in our exports to China. https://www.stats.govt.nz/information-releases/overseas-merchandise-trade-september-2023/
As I said earlier, what happens in China and what China decides to do or not do - is holding our growth, economy, and prosperity to ransom.
We need to develop alternative markets and trade partners urgently. US, UK and Australia saw the light long ago. We are just waking up...

[winner69]

Big reason for that is 20% fall in our exports to China. https://www.stats.govt.nz/information-releases/overseas-merchandise-trade-september-2023/
As I said earlier, what happens in China and what China decides to do or not do - is holding our growth, economy, and prosperity to ransom.
We need to develop alternative markets and trade partners urgently. US, UK and Australia saw the light long ago. We are just waking up...

That’s only recent but exports still double what they were 7/8 years ago

My chart goes back to last century …..and was in response to daytr question as to what FTA bring in ……..little as exports % GDP been in decline for many years ….in spite of large increase in exports to China over time

[beacon]

That’s only recent but exports still double what they were 7/8 years ago

My chart goes back to last century …..and was in response to daytr question as to what FTA bring in ……..little as exports % GDP been in decline for many years ….in spite of large increase in exports to China over time

Point taken, thanks Winner69. Yea, during the last 26 years, NZ exports to China have increased at an annualized rate of 16.6%, from $416M in 1995 to $22.5B in 2021. https://oec.world/en/profile/bilateral-country/chn/partner/nzl

Yet Exports as a % of GDP have fallen. Trade as a % of GDP has also fallen in the last 26 years. https://www.macrotrends.net/countries/NZL/new-zealand/trade-gdp-ratio#:~:text=Trade%20is%20the%20sum%20of,a%204.23 %25%20increase%20from%202020.

Time for exporters to go back to their drawing boards and innovate/ increase competitiveness and USP. Banking on a depreciating NZD is not going to provide salvation in the coming decade.

[Daytr]

I agree it would be good to diversify NZs trade but my question is does that increase trade overall? Perhaps some the rest will be transferred from one to the other. Trade with India may also create some trade tension with China as NZ has a pivotal role in the global dairy markets.

Can NZ produce more? Perhaps of some products.

Having had dealings with both China & India in the gold market, I know where I would rather direct my attention. Negotiations with Indians are exhausting and particularly frustrating and from my experience not worth the investment of time & energy.

[Daytr]

Big reason for that is 20% fall in our exports to China. https://www.stats.govt.nz/information-releases/overseas-merchandise-trade-september-2023/
As I said earlier, what happens in China and what China decides to do or not do - is holding our growth, economy, and prosperity to ransom.
We need to develop alternative markets and trade partners urgently. US, UK and Australia saw the light long ago. We are just waking up...

Australia is more reliant on China than we are. India is a very different proposition to China.

I assume those stats are in NZD?
Considering the NZD was lower in the 3rd quarter than the 2nd makes those numbers even worse.

[winner69]

Biden not going too good in the polls …….could help usd

[beacon]

Australia is more reliant on China than we are. India is a very different proposition to China.

I assume those stats are in NZD?
Considering the NZD was lower in the 3rd quarter than the 2nd makes those numbers even worse.

Yea, in NZD.

[beacon]

Having had dealings with both China & India in the gold market, I know where I would rather direct my attention. Negotiations with Indians are exhausting and particularly frustrating and from my experience not worth the investment of time & energy.

It was the same with China, and remains so. See how long, contentious, crafty and cumbersome their border / trade negotiations are with their neighbours/ trade partners. How they get patents, what they did to Fonterra IP and what their reputation in WTO is, etc.

I don't know how long your experience in dealing with both nations is, or how recent - but I see India is changing. Remarkable has been its rise in repute, involvement in International organisations, conduct during Covid, and improvements in "ease of doing business" etc. According to the World Bank, India ranked 63rd in 2022 in ease of doing business across the world among 190 countries, improving its rank from 142 in 2014. Back in 2018, the Modi government also pledged to take the country to the top 50 in EoDB rankings. https://inc42.com/buzz/economic-survey-2022-23-india-reduced-39000-compliances-ease-of-doing-business/#:~:text=According%20to%20the%20World%20Bank,top%2 050%20in%20EoDB%20rankings.

Anyway, India or China - no gain, without at least some pain. I never said making money is easy. But India is the lowest hanging fruit for NZ, IMO.

[beacon]

You realize dot plots are now showing Fed funds rates halving in 3 years, at the minimum. See what is happening to treasuries, share markets...
I'm being very conservative at 65c NZD USD. I expect NZD USD over 70c within 3 years now, as NZ- India relationship gets going.

Adrian Orr and Reserve Bank (RBNZ) tell MPs, new Government that inflation is ‘number one evil’ for everyone
https://www.nzherald.co.nz/business/adrian-orr-and-reserve-bank-rbnz-face-up-to-mps-new-government-at-select-committee/H42OXBBTWNAIXFB26LYADRFB4Y/

[beacon]

... interest rates will have to remain high for longer, chief economist Paul Conway told Parliament's finance and expenditure committee (FEC).

RBNZ governor Adrian Orr told the committee ... record levels of net migration has meant that although per-capita consumption is declining, overall demand is rising, raising the question of “do we have to maintain more restrictive for longer with monetary policy.”

https://tmmonline.nz/article/976522645/rbnz-record-immigration-may-mean-rates-stay-high-for-longer?utm_source=GR&utm_medium=email&utm_campaign=Orr+fronts+up+to+new+Govt%3A+TMM+Conf erence+tickets+available

[beacon]

...While overall the Mini Budget decisions will improve the fiscal outlook presented in the Half Year Update, it is anticipated that once combined with the other signalled commitments in the Mini Budget (eg, tax plans) expected to be agreed in the future, the overall impact would be broadly neutral over the forecast period.

From Mini Budget Summary today

Go NZD! :t_up:

[winner69]

Be .63 by Christmas eh Beacon

Go NZD! :t_up:

[beacon]

Be .63 by Christmas eh Beacon

Go NZD! :t_up:

Finance Minister Nicola Willis said: We are determined to bring down inflation.

The mini-budget is STILL ending up with a surplus, albeit negligible... after "laying bare" and dealing with Labour's many "financial time-bombs", and much of "economic and fiscal vandalism."
https://www.nzherald.co.nz/nz/politics/mini-budget-2023-finance-minister-nicola-willis-lifts-lid-after-hyefu/PL3ISOCT7BFT5JF5RNOOZB3CNE/

So, why not? You're not giving NZD much time to work the magic, but you have my blessing. 63c by Christmas! Go NZD!
Christmas will come early for NZD if the 0.6275 resistance gets taken tonight. We tested it last night, even without Orr, Conway and Willis' pronouncements

[winner69]

Front page todays paper says RBNZ determined to drive interest rates down to targeted 1% to 3% range

Might impact nzd

[beacon]

Front page todays paper says RBNZ determined to drive interest rates down to targeted 1% to 3% range

Might impact nzd

Do you mean?: RBNZ determined to drive INFLATION down to targeted 1% to 3% range

[beacon]

So, why not? You're not giving NZD much time to work the magic, but you have my blessing. 63c by Christmas! Go NZD!
Christmas will come early for NZD if the 0.6275 resistance gets taken tonight. We tested it last night, even without Orr, Conway and Willis' pronouncements

Almost breached 63c last night, eh Winner69. :)

[winner69]

Do you mean?: RBNZ determined to drive INFLATION down to targeted 1% to 3% range

Definitely said interest rates

Suppose journos don’t always get it right

[beacon]

Might impact nzd

Yeah, NZD should keep improving versus USD, this year and next. We seem to have many Inflation hawks currently in the media, the RBNZ, the Government as well as the Opposition.

[beacon]

Be .63 by Christmas eh Beacon

Go NZD! :t_up:
Good call Winner69. 63c breached last night.
Called by Winner69 20.12.23. Milestone Achieved 23.12.23

[winner69]

Overnight a Mild PCE Deflator was good news for the Fed …… and core durable goods orders posts a big positive surprise and could be bottoming.

[beacon]

Overnight a Mild PCE Deflator was good news for the Fed ……

Agree, Core PCE gone below the 2% psychological threshold (1.9% annualized over 6 months). Calls for FFR cuts got louder. They want cuts beginning from May 24, no later now.
USD and DXY weakness to persist in 2024
https://www.tradingview.com/symbols/TVC-DXY/

[winner69]

Hey beacon …it’s .634 at mo

When is it going to stop going up ?

[beacon]

Hey beacon …it’s .634 at mo

When is it going to stop going up ?

Lol! Hope you bought some Winner69.
Have a happy New Year

[winner69]

U.S. Dollar Index DXY forms its first Death Cross in the last 12 months

[winner69]

Corn price collapsing while cocoa prices are 50 year high

[beacon]

Hey beacon …it’s .634 at mo

When is it going to stop going up ?

Looks like you got your wish in the New Year, Winner69. Slipped through 62c a few times now, before quickly bouncing back up. Some think NZD'll linger down there awhile, before resuming its uptrend. Let's see...

NZ dollar looks set for deeper short-term correction
https://businessdesk.co.nz/article/economy/nz-dollar-looks-set-for-deeper-short-term-correction?utm_source=nzh&utm_medium=referral&utm_campaign=nzh-home

[beacon]

U.S. Dollar Index DXY forms its first Death Cross in the last 12 months

Death Cross Formation:


When the 50-day moving average falls below the 200-day moving average, it creates the Death Cross pattern on a price chart.
This pattern is often seen as a bearish signal, indicating that the stock’s price momentum has weakened.



Historical Significance:


Some investors believe the Death Cross predicts severe bear markets, citing examples from history such as 1929, 1938, 1974, and 2008.
But focusing only on bear-market years ignores numerous instances when the Death Cross signaled minor corrections rather than major downturns.


Returns After a Death Cross:


Contrary to its ominous name, the Death Cross has been followed by above-average short-term returns in recent years.
For instance, the S&P 500 index was higher a year after the Death Cross about two-thirds of the time, with an average gain of 6.3% during that period.
Over shorter time frames, the Nasdaq Composite index showed even more appealing returns after a Death Cross: approximately 2.6% in one month, 7.2% in three months, and 12.4% in six months.
https://www.investopedia.com/terms/d/deathcross.asp

[beacon]

Risks: Iran, Hezbollah or Saudi martial involvement in MidEast War theatre - not just political posturing and noise!


US-owned cargo ship near Yemen hit by missile as fears grow conflict could spread

Yemen’s Iran-backed Houthis have been attacking commercial ships in the Red Sea it says are linked to Israel or bound for Israeli ports, aiming to support Palestinians in the war in Gaza.

US and British forces responded last week by carrying out dozens of air and sea strikes on Houthi targets in Yemen and have hit scores of targets.

The Houthi movement controls much of Yemen after nearly a decade of war against a US-backed and Saudi-led coalition.

https://www.theguardian.com/world/2024/jan/15/cargo-ship-near-yemen-reportedly-hit-by-missile-as-fears-grow-conflict-could-spread

Risk-off if conflict spreads = Flight to USD safety, short-term, IMO.
But more US spending on War = USD weakens more long term

[Daytr]

https://www.interest.co.nz/economy/125917/reserve-bank-says-its-chief-economist-will-be-speaking-economic-developments-full

[beacon]

https://www.interest.co.nz/economy/125917/reserve-bank-says-its-chief-economist-will-be-speaking-economic-developments-full

Despite what David Hargreaves (https://www.interest.co.nz/users/david-hargreaves) believes, I am unconvinced that Conway is coming to announce RBNZ capitulation on OCR rates.

[beacon]

All bets are off now - in the short term

19 Oct 2023 — U.S. State Department issues ‘worldwide caution’ alert as tensions in the Middle East soar.
Citing the potential for terrorist attacks and violence, the State Department warned Americans worldwide to exercise increased caution.
https://www.cnbc.com/2023/10/19/us-issues-worldwide-caution-as-tensions-in-the-middle-east-soar.html

18 Jan 2024 — U.S. State Department: No Sign of "Full Blown Conflagration" despite Middle East flareups
"... remains unlikely to expand into a broader regional war, despite numerous cross-border flashpoints, including recent Iranian missile and drone strike on targets in Pakistan... "
"... We do not believe [Iranians] want to see the conflict escalated..."

If no flight to USD safety needed in the short-term, NZD is undervalued at under 61c. Time to U-turn back and breach 65c...

[beacon]

Trump Wins Iowa
https://www.stuff.co.nz/world/us-canada/301040475/donald-trump-wins-iowa-caucuses-in-crucial-victory

Trump on track for Presidential Nomination
https://www.politico.eu/article/europe-prepares-stand-alone-as-us-trump-returns-2024-elections/

Trump wants a weak USD
"... a weaker dollar would help boost US manufacturing and close the trade deficit by making American goods more affordable to foreign countries..."
https://www.foxbusiness.com/economy/trump-weaker-us-dollar

You do the math...

[winner69]

Latest PMI shows December 'miserable’ for manufacturers

Not good

[beacon]

ANZ economists expect RBNZ to keep hawkish stance, before making abrupt OCR cut in August.
https://www.nzherald.co.nz/business/when-will-mortgage-rates-finally-fall-central-bankers-expected-to-keep-talking-tough-on-inflation/BL6OCJK6ENGYRCDNJHHAI4SULI/

[beacon]

If no flight to USD safety needed in the short-term, NZD is undervalued at under 61c. Time to U-turn back and breach 65c...

Westpac agrees, "should the Fed ease policy before RBNZ", which looks highly likely now... https://www.bloomberg.com/news/artic...d=premium-asia

Higher dairy prices, stabilizing housing market, continuing net positive immigration, strengthening tourism in NZ...
While US get drawn in with more and more spending in proxy wars in Ukraine, Taiwan, Israel, Korea theatres...

[beacon]

YoY tradeable inflation rate 4.7%
YoY non-tradeable inflation rate 5.9%

QoQ tradeable inflation rate -0.2%
QoQ non-tradeable inflation 1.1%
https://www.stats.govt.nz/information-releases/consumers-price-index-december-2023-quarter/#:~:text=annual%20inflation%20rate%20was%204.7,inf lation%20rate%20was%20%2D0.2%20percent

“While this is the smallest annual rise in the CPI in over two years, it remains above the Reserve Bank of New Zealand’s target range of 1% to 3%,” Stats NZ consumers prices senior manager Nicola Growden said. https://www.stuff.co.nz/business/350156362/inflation-hits-slowest-rate-two-years-stats-nz-says

Since tradeable inflation, which is affected by international factors, fell more than domestic inflation... RBNZ not likely to cut soon, if it cuts at all this year, as RBNZ as well as the Government remain inflation hawks for the time being. Time for NZD to head towards 65c, and beyond if/when FED cuts aggressively

[winner69]

Hey beacon, what’s going on ….NZDUSD heading towards sub 60

Was it Conways fault saying NZ getting poorer and poorer with little hope of any improvement in productivity

[JBmurc]

Hey beacon, what’s going on ….NZDUSD heading towards sub 60

Was it Conways fault saying NZ getting poorer and poorer with little hope of any improvement in productivity

Yes and just watch inflation in goods head higher again I see Fuel prices once again marching higher ... no one in business I've talked to is talking about costs coming down ..

[beacon]

Hey beacon, what’s going on ….NZDUSD heading towards sub 60

Was it Conways fault saying NZ getting poorer and poorer with little hope of any improvement in productivity

I think it is more what Powell said, than Conways. Powell all but killed March cut, hurting all G10 - delaying USD weakness.
NZD hurt more due to China turmoil... but that is getting sorted out too, ostensibly.
I know what I'll do again, if it ventures sub 60 :)

[beacon]

Yes and just watch inflation in goods head higher again I see Fuel prices once again marching higher ... no one in business I've talked to is talking about costs coming down ..

Strengthening the case of "higher [OCR] for longer." And hence for NZD gaining strength, IMO.

[beacon]

New data from Stats NZ today shows the unemployment rate was:
4% in December 2023 quarter,
vs 3.9% in the previous quarter.
vs 4.3% market expectation.


So, economy is holding up better than expected, RBNZ likely to continue holding (OCR) interest rates at current levels for longer. So NZD back up to 61c...
https://www.nzherald.co.nz/business/jobs-surprise-unemployment-rate-rises-slightly-but-slowdown-not-as-bad-as-expected/O3IIIGHGA5GDBCW5ZOUKPKSRDY/

[winner69]

New data from Stats NZ today shows the unemployment rate was:
4% in December 2023 quarter,
vs 3.9% in the previous quarter.
vs 4.3% market expectation.


So, economy is holding up better than expected, RBNZ likely to continue holding (OCR) interest rates at current levels for longer. So NZD back up to 61c...
https://www.nzherald.co.nz/business/jobs-surprise-unemployment-rate-rises-slightly-but-slowdown-not-as-bad-as-expected/O3IIIGHGA5GDBCW5ZOUKPKSRDY/

And the other unwelcome surprise for the RBNZ was that wage inflation was also stronger than expected.

[Daytr]

And the other unwelcome surprise for the RBNZ was that wage inflation was also stronger than expected.

Unemployment is a lagging indicator and participation rates need to be considered.

[winner69]

Unemployment is a lagging indicator and participation rates need to be considered.

the labour force participation rate dipped to 71.9%

This guy has the right idea ..from interest.co.nz … Henry Russell, an economist at ANZ, warned this could prompt the Reserve Bank of New Zealand (RBNZ) to lift the OCR from 5.50% to 5.75% at its next review on February 28. “A 25 basis points hike later this month has become a very real possibility, and RBNZ Governor Orr’s speech on 16 February could raise the market-perceived probability of a hike further,” Russell said.

[beacon]

Strong Global Dairy Trade auction
Higher NZ farmgate milk prices expected
https://www.nzherald.co.nz/business/higher-nz-farmgate-milk-prices-beckon-after-strong-global-dairy-trade-auction/7DSZPGDLLBCXNIYY7L7GQX5QHY/

[beacon]

I am unconvinced that Conway is coming to announce RBNZ capitulation on OCR rates.

Conway did not capitulate on rates. And now this from Orr (emphasis is mine) ...

“Central banks around the world have been trying to explain this ad nauseam to the public - that whilst inflation is coming down, we are not there yet, and the last few yards may be very difficult, because we really need to anchor that 2 per cent inflation expectation,” Orr said.
The annual inflation rate fell to 4.7 per cent in the December quarter, according to the latest Stats NZ data - a level Orr noted was still “more than two times 2 per cent”.

While inflation expectations have been tracking down, the 38 business leaders and economic forecasters, surveyed as a part of the RBNZ’s Survey of Expectations in late-January, only saw the annual inflation rate falling to 3.3 per cent in a year’s time, and 2.5 per cent in two years’ time.

Orr said: “The number one thing that we’re always concerned about is that people would lose confidence that we are aiming for that 2 per cent with real vim and vigour.”
https://www.nzherald.co.nz/business/reserve-banks-adrian-orr-on-inflation-interest-rates-we-are-not-there-yet-and-the-last-few-yards-may-be-very-difficult/24RVNSJPHFAJLEGRCAF2HDJYZA/

[beacon]

Conway did not capitulate on rates. And now this from Orr ...

RBNZ holds OCR at 5.5%; no cuts until mid-2025
https://tmmonline.nz/article/976522840/rbnz-holds-ocr-at-5-5-no-cuts-until-mid-2025

And yet the market dumped NZD... I topped up. Thank you Mr. Market

[winner69]

Nzdusd dipped below 59 overnight

Beacon …what’s going on mate

Not heading back to 55/56 is it

[wizAlvin]

NZDUSD seems to have broken down from the very strong level of 0.605 to the very strong level and significant number of 0.6 - possible top to base of that zone. No prior evidence of a consolidation area here - plenty of occurrences of rejection off both levels.

[stoploss]

Nzdusd dipped below 59 overnight

Beacon …what’s going on mate

Not heading back to 55/56 is it
Probably is , negative GDP, retail sales muted ,households struggling to pay the rent or mortgage , NZX 50 gone nowhere for 2 years ,any good news stories out there ?

[beacon]

Nzdusd dipped below 59 overnight. Beacon … Not heading back to 55/56 is it

I've got my powder dry :)

[beacon]

Beacon …what’s going on mate

US Inflation surprised on the upside again, causing US 10 Yr Treasuries to perk up and punters to question whether the FED promised 3 FFR cuts in 2024 are really set in stone.
Meanwhile, speculation went up that RBNZ may cut OCR sooner than FFR are cut. Also, NZD moves remain beholden to China moves
We are slowly, but surely looking for China+ options - as seen in Winston openly condemning China cyber hacking NZ parliament etc. - despite Wang Yi coming in person to NZ.

On balance, there is no sane reason at the moment for NZD to visit 55/56c, but if it keeps moving in that direction I hope I have enough dry powder (like RBNZ ;))

[Daytr]

US Inflation surprised on the upside again, causing US 10 Yr Treasuries to perk up and punters to question whether the FED promised 3 FFR cuts in 2024 are really set in stone.
Meanwhile, speculation went up that RBNZ may cut OCR sooner than FFR are cut. Also, NZD moves remain beholden to China moves
We are slowly, but surely looking for China+ options - as seen in Winston openly condemning China cyber hacking NZ parliament etc. - despite Wang Yi coming in person to NZ.

On balance, there is no sane reason at the moment for NZD to visit 55/56c, but if it keeps moving in that direction I hope I have enough dry powder (like RBNZ ;))

No sane reason.... ? Not saying it will but it's not unreasonable at all to think the Kiwi could do that.

It will depend perhaps on which central bank acts first. The US economy is in a lot better shape than NZ. Other than Government debt that is & its funny we are the ones so concerned about the level of Government debt....

Adrian Orr on RNZ this morning for the first time signaled that lower rates are getting closer as inflation is returning towards the desired band and the economy weakens

[winner69]

NZDUSD turned turtle overnight

Something to do with a strong ISM they say

[Daytr]

the labour force participation rate dipped to 71.9%

This guy has the right idea ..from interest.co.nz … Henry Russell, an economist at ANZ, warned this could prompt the Reserve Bank of New Zealand (RBNZ) to lift the OCR from 5.50% to 5.75% at its next review on February 28. “A 25 basis points hike later this month has become a very real possibility, and RBNZ Governor Orr’s speech on 16 February could raise the market-perceived probability of a hike further,” Russell said.

NZD back to 59c Winner.
Henry old boy must be regretting sticking his head above the parapet.

[winner69]

NZD back to 59c Winner.
Henry old boy must be regretting sticking his head above the parapet.

Heading to 55c I’m next month or so

And then maybe even lower

[winner69]

Nzd on fire post RBNZ holding OCR with a hint they might take it up soon

[winner69]

Members agreed that persistence in non-tradable inflation remains a significant upside risk .. the Committee discussed the possibility of increasing the OCR .. interest rates may have to remain at a restrictive level for longer than anticipated in the February Monetary Policy Statement"