RBNZ keeps hawkish tone

<p>The RBNZ hiked interest rates by 25 basis points (as expected) overnight but surprised the market with a continued hawkish tone to the subsequent statement. […]</p>

The RBNZ hiked interest rates by 25 basis points (as expected) overnight but surprised the market with a continued hawkish tone to the subsequent statement. Adding inflation pressures will increase the need for further tightening, despite the recent fall in Dairy prices.

In Australia, the labour report showed employment fell by 4,800 jobs in May versus the expectation to add 10,000 and the overall unemployment rate remained steady at 5.8%.

The diversification across the Tasman Sea saw AUD/NZD move 150 points in the session before seeing some limited retracement as traders noted the dismal Australian jobs data was due to the reduction in the part-time component.

Tonight, the market will be looking at the industrial production and retail sales releases from China that’s had the market talking about a further cut to the reserve requirement ratio to support the economy. This is on speculation that the upcoming data could disappoint.

Tensions in Iraq have added a slightly negative tone to risk as rebels seize the town of Tikrit, which, along with further unrest in Libya, sent oil prices soaring to three-month highs.

Today, the focus will switch to the US and the consumer, with retail sales data scheduled to be released from across the pond – along with the weekly jobless claims data. The only distraction this morning will be the latest industrial production data from Europe.




Supports 1.3500-1.3480-1.3400 | Resistance 1.3555-1.3580-1.3625




Supports 101.75-101.40-100.80  | Resistance 102.50-102.85-103.05




Supports 1.6770-1.6735-1.6690 | Resistance 1.6825-1.6885-1.6920



Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.