Nzd usd

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Kiwibank Chief Economist Jarrod Kerr sees it at 55c by Christmas 2023. He might want to review his Target Price up though, seeing that the ANZ World Commodity Price Index gained 1.3% in September (ANZ chief economist Sharon Zollner's note out today) after trending lower for the previous three months. The lift, although modest, was BROAD_BASED with ALL MAJOR SECTORS, except horticulture, lifting. https://watermarker.singletrack.io/A...Headers%3Dhost

New Zealand is finally “winning the war” on inflation, Kiwibank chief economist Jarrod Kerr says, "no more rate hikes needed"
https://www.nzherald.co.nz/business/...DAQ6UH42OMYUQ/

Further rate hikes look to be off the table. The chance of any further rate hike dropped from around 84% to 40%, according to BNZ Bank's head of research, Stephen Toplis. A first-rate cut is now priced in for February 2025, a few months earlier than previously.
https://businessdesk.co.nz/article/e...paign=nzh-home

A strengthening economy can't have a weakening currency (for long).

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More money printing and balance sheet expansion on the way?

U.S. can ‘certainly’ afford military support to both Israel and Ukraine, Janet Yellen says
https://www.cnbc.com/2023/10/16/us-c...llen-says.html

Sure she can? Debt is near or higher than 100% of output in USA (and in UK and Italy too, so not sure how much QE Europe can do to fund Israel)). Ageing populations, rising pensions, climate change management and geopolitical risks such as wars in Ukraine, Middle East (and potentially South East Asia) mean significant spending pressures ahead. Add to that higher interest rates "higher for longer", and you have an accelerating serviceability bleed. Yet, the USD rises... ??

[Daytr]

New Zealand is finally “winning the war” on inflation, Kiwibank chief economist Jarrod Kerr says, "no more rate hikes needed"
https://www.nzherald.co.nz/business/...DAQ6UH42OMYUQ/

Further rate hikes look to be off the table. The chance of any further rate hike dropped from around 84% to 40%, according to BNZ Bank's head of research, Stephen Toplis. A first-rate cut is now priced in for February 2025, a few months earlier than previously.
https://businessdesk.co.nz/article/e...paign=nzh-home

A strengthening economy can't have a weakening currency (for long).

In the current environment I would suggest lower inflation which in turn will mean interest rates have peaked and will likely be reduced sooner than only recently thought are all negatives for the Kiwi.

The recent dairy auctions may help offset some of that.

A bit like US equity markets, I think the views are mixed and there is no clear direction from here.

[winner69]

In the current environment I would suggest lower inflation which in turn will mean interest rates have peaked and will likely be reduced sooner than only recently thought are all negatives for the Kiwi.

The recent dairy auctions may help offset some of that.

A bit like US equity markets, I think the views are mixed and there is no clear direction from here.

Orr a wimp (and has a political bias) …should have raised rates last month but didn’t …needs to raise rates next month but won’t ……so Feb 2024 will be a big shock when forced to raise.

Even RBA talking raising rates in a few weeks time.

Inflation is here to stay for longer than we want.

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Inflation is here to stay for longer than we want.

Tech is deflationary, and so is immigration. Oil flared up due to Israel action, but pressure building on Israel to cease fire.
Back home also, record migration continues - which is deflationary. https://www.interest.co.nz/economy/1...nths-september

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.

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Luxon says tax cuts will definitely go ahead - to deliver tax relief for low and middle income New Zealanders.
https://www.interest.co.nz/economy/1...commitment-tax

ACT leader David Seymour is known to be strongly focused on reducing government spending, arguing this will help fight inflation.
Hope they deliver the accountability they espouse.

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Orr a wimp (and has a political bias) …should have raised rates last month but didn’t …needs to raise rates next month but won’t ……so Feb 2024 will be a big shock when forced to raise.

I didn't like Orr leading the global pack in raising rates early and fast, but to his credit, he proved to be prescient.
Those high interest rates are hurting, so he (or US Fed, for that matter) should NOT be raising rates further at all (US Inflation already down to 2.3%).
Attachment 14795

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Those high interest rates are hurting, so he (or US Fed, for that matter) should NOT be raising rates further at allAttachment 14795

A slight majority still see a cut before the middle of 2024
https://www.reuters.com/markets/us/f...on-2023-10-18/

Fed's Waller: can wait on data to decide on rate path
https://finance.yahoo.com/news/feds-...160244333.html
In a strong signal that the Federal Reserve won't raise interest rates at its next meeting, Fed Governor Christopher Waller, one of the Fed's most hawkish policymakers, said he wants to "wait, watch and see" ... "Should the real side of the economy soften, we will have more room to wait on any further rate hikes and let the recent run-up on longer-term rates do some of our work."

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2023 1013 GDT reverted to the mean.JPG

Latest dairy auction higher 4th time in a row - prices up 4% this time, recovering all the falls since May 2023.
ASB and Westpac analysts upgrade their payout forecasts.
NZD should be north of 62c

[winner69]

Lots of red down arrows for nzd this morning

Heading to 55/56