NZ inflation and the responses (read from the bottom up for the chronology):
- RBNZ's own inflation data: 5.4% y/y in Q3 (from 5.2% prior)
- Westpac are forecasting a 75bp Reserve Bank of New Zealand rate hike on November 23
- BNZ are now forecasting a 75bp Reserve Bank of New Zealand rate hike on November 23
- Forecasts for RBNZ rate hikes are being ramped higher after surging inflation report
Other:
- Reports the White House is planning an oil reserve (SPR) release announcement this week
- NZ Q3 CPI 2.2% q/q (expected 1.6%)
- ECB board member Isabel Schnabel is speaking today, Tuesday, 18 October 2022
- BOJ Gov Kuroda says will keep a close eye on FX market moves
- The barrage of FX comments continues from Japan - more from fin min Suzuki and PM Kishida
- PBOC sets USD/ CNY reference rate for today at 7.1086 (vs. estimate at 7.1060)
- Japan chief cabinet secretary Matsuno says will take appropriate steps on excess FX moves
- RBA's Bullock - she still feels there is a path to get inflation donw without a recession
- RBA Oct. minutes: More interest rate hikes ahead - "Rates not especially high"
- RBA dep gov Bullock says further interest rate hikes are on the way in the months ahead
- Japan finance minister Suzuki says cannot tolerate excessive FX move driven by speculators
- Heads up for Bank of Japan Governor Kuroda to speak from 0050 GMT
- China to postpone release of GDP data until after the Communist Party National Congress
- Australia consumer confidence weekly survey drops again, down 2.8% on the week
- Goldman Sachs bearish EUR/USD to year end: risks are probably still skewed to the downside
- UK PM Truss says sorry, says she is sticking around
- HKMA (Hong Kong's 'central bank') intervention to support the HK dollar
- Forexlive Americas FX news wrap: Dollar moves lower, helped by risk on flows
- Trade ideas thread - Tuesday, 18 October 2022
- USD/JPY above 149 - verbal intervention, at least, is coming for sure today from Japan
The interest early in the session was on the New Zealand Q3 inflation data. It came in on a rocket higher, way above consensus and way above Q2. It resulted in a barrage of higher interest rate hike forecasts from New Zealand analysts. The Reserve Bank of New Zealand meet next on November 23 and the consensus is now for +75bp. More on all this in the bullet points above.
NZD/USD responded by rising, but the move was subdued and short-lived. Highs have been just above 0.5670 and the retrace, as I post, has been back to under 0.5650. AUD/USD traced out a similar pattern.
Speaking of a barrage, that is what we got from Japanese officials (Japan finance minister Suzuki, chief cabinet secretary Matsuno, Japan PM Kishida and Bank of Japan Governor Kuroda) in response to USD/JPY rising above 149.00. USD/JPY dribbled a little lower in response, just under 148.70. Its back around 148.90 as I update. So, a small dip only, but it didn’t cost Japan anything except some hot air.
Elsewhere across major FX small ranges have prevailed.
Oil has lost some ground with reports (Bloomberg) that the US is planning another release of oil from its reserve. Circa 10 to 15 mn barrels release is the rumour. Keeping your eye on mid-term election developments and the date (November 8) as a current ‘fundamental’ for the oil market would be wise. Rising gasoline prices heading into the election would not be welcome by the incumbent administration. They’ll work to prevent this, an SPR release would be such a tactic.
Oil update:
