New Zeland PPI showed a heavy increase in price pressures for the Q2. The inputs index rose 5.6 percent and the ouputs index rose by 8.5 percent.
Normally, this would be the material that rate hike speculation is made of. These days however, it is more likely an argument for less of a rate cut. The RBNZ was expected to cut rates by 50bps during their september meeting to help ease the economic slowdown that is now seeming to be a global slowdown. The markets are now reducing that expectation to a 25bps cut because of pricing pressures that businesses are facing.
The New Zealand dollar reacted mildly by bouncing around in range. Risk aversion has been weighing heavily on the high yielding single currency. It continues to firm as the market progresses on its recovery from risk liquidation.
Normally, this would be the material that rate hike speculation is made of. These days however, it is more likely an argument for less of a rate cut. The RBNZ was expected to cut rates by 50bps during their september meeting to help ease the economic slowdown that is now seeming to be a global slowdown. The markets are now reducing that expectation to a 25bps cut because of pricing pressures that businesses are facing.
The New Zealand dollar reacted mildly by bouncing around in range. Risk aversion has been weighing heavily on the high yielding single currency. It continues to firm as the market progresses on its recovery from risk liquidation.
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