Tricky One For The RBNZ
It’s RBNZ time this week, and it’s going to be a very tricky one to navigate for the bank. On the one hand they have plenty to be happy about, but on the other they don’t want to come across too happy and risk undoing some of the positives.
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We interpret and explain price moves in real-time, 24 hours a day. Our team of analysts produce text, video and audio commentary.
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To use the phrase better-than-expected is probably an understatement when referring to some of the recent economic data from New Zealand. Whether you look at growth, inflation or labour data it’s been much better than both the RBNZ as well as the market had anticipated.
This already saw the bank putting a pause on the idea of moving the OCR into negative territory as their November policy statement explained that they would not hesitate to use a negative rate IF it was necessary. In market talk that could also be translated as “we don’t think negative rates are necessary right now”.
After that meeting things has just gotten better, not only on the data front but also on the virus front with the first vaccines administered over the weekend, despite of course the recent mini lockdown that was put in place.
So, the bank really has their work cut out for them this week because they have a lot to be happy about, but they won’t want to run the risk of tighter financial conditions by coming across to positive and risking a jolt higher in the NZD, but more on that in this week’s video.
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Highlights of the video:
00:27 – Current Baseline
03:31 – Baseline expectations for the upcoming week
08:05 – Sentiment Shifts & Trade Plan
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If you find these weekly analysis and trade ideas useful, you’ll love Financial Source. There’s a link below were you can learn more about it
https://financialsource.co
----
We interpret and explain price moves in real-time, 24 hours a day. Our team of analysts produce text, video and audio commentary.
You understand the markets and trade with confidence. Learn more at our website here: https://financialsource.co
-----
To use the phrase better-than-expected is probably an understatement when referring to some of the recent economic data from New Zealand. Whether you look at growth, inflation or labour data it’s been much better than both the RBNZ as well as the market had anticipated.
This already saw the bank putting a pause on the idea of moving the OCR into negative territory as their November policy statement explained that they would not hesitate to use a negative rate IF it was necessary. In market talk that could also be translated as “we don’t think negative rates are necessary right now”.
After that meeting things has just gotten better, not only on the data front but also on the virus front with the first vaccines administered over the weekend, despite of course the recent mini lockdown that was put in place.
So, the bank really has their work cut out for them this week because they have a lot to be happy about, but they won’t want to run the risk of tighter financial conditions by coming across to positive and risking a jolt higher in the NZD, but more on that in this week’s video.
----
Highlights of the video:
00:27 – Current Baseline
03:31 – Baseline expectations for the upcoming week
08:05 – Sentiment Shifts & Trade Plan
----
If you find these weekly analysis and trade ideas useful, you’ll love Financial Source. There’s a link below were you can learn more about it
https://financialsource.co
