RBNZ: Markets expect two more rate cuts – Westpac

Dhwani Mehta FXStreet

Analysts at Westpac offer their thoughts on the market expectations from the Reserve Bank of New Zealand (RBNZ) on its monetary policy.

Key Quotes:

“Increasingly rocky global conditions have reinforced our expectations that economic conditions in New Zealand are going to get worse before they get better. Business confidence surveys have reflected that, with last week’s survey also indicating a fall inflation expectations.

This fall is very important in terms of the outlook for monetary policy, and was referenced by RBNZ Governor Orr as well as other Bank officials as a key factor underpinning August’s rate cut. The recent downshift in expectations means that the uphill battle the RBNZ has been fighting to generate a sustained lift in inflation has now gotten that much harder.

The next update on expectations will be the RBNZ’s own Survey of Expectations on 12 Nov (only one day before the Nov policy decision but the RBNZ gets the results about a week before it’s released publicly).

This survey could again have a big impact on the Monetary Policy Committee’s thinking, just as it did in August. It will certainly be a key event for markets to watch ahead of the Nov policy statement and could impact market pricing. We expect the RBNZ will cut the cash rate by 25bps in November, taking it to a fresh record low of 0.75%.”

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.