The New Zealand dollar sinks as the RBNZ adds to the global rate cut narrative
The kiwi is the outright laggard on the day so far after the RBNZ moved to say that its next rate move will likely be down, shifting to a more dovish narrative. Rate cut calls for this year immediately came and markets have now fully priced in one by November with almost a 3/4 chance of one in August. For some context, markets only priced in a full rate cut by June 2020 prior to today's RBNZ meeting.
The aussie is also dragged lower as a result with China's slump in industrial profits not really helping as well. Despite the fact that equities are holding somewhat steady, bond yields are once again doing its own thing with Treasury yields currently down across the curve. 10-year yields are lower by 1.4 bps to 2.408% and that is helping to keep risk sentiment on edge ahead of European trading.
In turn, that is still helping to keep the yen underpinned while the dollar is holding a little firmer against the rest of the major bloc as well. The pound is slightly on the back foot with the Brexit saga still ongoing with indicative votes set to begin today and possibly carry on until the next week. Votes will begin at around 1900 GMT with the results set to be announced by John Bercow later in the evening.
