The lead in to the Asia session – US sanctions announced:
RBNZ:
- RBNZ Governor Orr - says capacity pressures in the economy are tightening still
- NZD higher on the Reserve Bank of New Zealand's two notable hawkish surprises
- NZD marked higher on the RBNZ policy decision and statement
- NZD - RBNZ hikes cash rate by 25bps as expected
Other:
- Nomura awaiting an opportunity to buy EUR/JPY
- Heads up for a public holiday in Russia on Wednesday 23 February 2022
- ICYMI - BofA expects the Bank of Japan to increase its interest rate in October PBOC sets USD/ CNY central rate at 6.3313 (vs. estimate at 6.3355)
- Reserve Bank of New Zealand decision and statement due at 0100 GMT
- Australia Construction work done for Q4 2021 -0.4% q/q (vs. expected 2.5%)
- Australia Wage Price Index for Q4 2021 +0.7% q/q (vs. expected 0.7%)
- Federal Reserve speakers coming up on Wednesday 23 February 2022 - Daly and Waller
- Reminder - Japanese markets are closed today, Wednesday 23 February 2022, for a holiday
- AUD traders note - 3 year yield has hit a 3 year high (almost)
- Ukraine foreign minister Kuleba says got a promise of more assistance from the US
- Imagery shows new deployment in Belarus of more than 100 vehicles, dozens of troop tents
- Oil - US says discussions on US hostages held by Iran are separate from nuclear deal talks
- Morgan Stanley have added long EUR/GBP to their 'top trades' ideas
- Canada PM Trudeau announces sanctions
- Trade ideas thread - Wednesday 23 February 2022
- Blinken says the planned meeting with Russian foreign minister is cancelled
- Blinken echoes Biden - will escalate sanctions if Russia escalates aggression in Ukraine
- More from Fed's Bostic - Fed needs to move off its emergency policy settings
- Dow & NASDAQ close lower for the 4th consecutive day. S&P lower for the 3rd day.
- Fed's Bostic says firms are being constrained by tight labour market
The Reserve Bank of New Zealand raised its official Cash Rate ( OCR ) by 25bp to 1% today. Its being characterised as a ‘hawkish hike’ with some members saying the choice of a 25 or 50 bp hike was finely balanced and that 50bp hikes in the future are not ruled out. The Bank’s forecast path ahead for the cash rate was moved significantly higher (the Bank raised its projected OCR track to 3.35% by the end of 2024, much higher than the 2.6% endpoint predictions released at the November ‘21 policy meeting, the meeting preceding today's). The Bank also announced when and how its balance sheet wind-down would commence and be handled (see bullets above).
The New Zealand dollar moved higher after the 0100 GMT decision and statement . Its dipped marginally from its highs. RBNZ Governor Orr spoke at his news conference (0200 GMT) and reiterated the potential for 50bp moves ahead.
On the data front we had wages information from Australia, showing negative real wages (wage growth slower than inflation) for Q4 2021 and also a big miss for construction completions. The miss for construction will be a substantial negative for the Q4 GDP figures due next week (Wednesday morning March 2, local Australian time).
News flow was sedate.
It was a Japanese market holiday today.
Major FX remained confined to small ranges only (NZD excepted, and even that was 40-odd points only, low to high).
NZD giving a little back as I post:
