RBNZ’s own preferred inflation model 3.6% y/y (prior 4.2%) for Q2 2024Federal Reserve speakers on Wednesday include Barkin, Waller and SchmidHeads up for RBA’s John Simon to speak on WednesdayAustralian June leading index – economy improving but to remain below trend into 2025Financial Times: Donald Trump warns US Fed chair not to cut rates before the electionPBOC sets USD/ CNY mid-point today at 7.1318 (vs. estimate at 7.2630)NZD/USD remains higher after the lower than expected NZ inflaiton dataANZ forecast an RBNZ interest rate cut in November (previously forecasting February 2025)Singapore Non-oil Domestic Exports (NODX) June 2024: -0.4% m/m vs. +4.1% expectedDespite the US data on Tuesday a September cut remains priced inICYMI – IMF says the Bank of Japan is facing challenges ensuring price stabilityJapan data – Reuters Tankan for July: Manufacturers Index +11 (prior +6)New Zealand Q2 CPI 0.4% q/q (expected 0.5%) & 3.3% y/y (expected 3.4%)Trump wants 60% tariff on China, China can respond by letting the yuan fallSociété Générale on US stocks – point to broadening profit cycle, improving breadthTrump disagrees with a September Federal Reserve rate cut – wants rates higher for longerTrump says he has no plans to fire Federal Reserve Chair PowellForexlive Americas FX news wrap 16 Jul. The shift into the Russell 2000 and Dow continuesOil – private survey of inventory shows a headline crude oil draw vs build expectedIMF expect only one Fed rate cut this yearDow and S&P close at recordsTrade ideas thread – Wednesday, 17 July, insightful charts, technical analysis, ideas
New
Zealand was the focus of the session, with Q2 inflation data from both StatsNZ and the Reserve Bank of New Zealand. The official
CPI data for the quarter from StatsNZ came in a little under the
median expectation, a welcome development. At 3.3% its still, of
course, above the upper end of the 2–3% RBNZ target band.
NZD/USD
rose on the day despite the lower CPI result. ANZ shifted their
forecast for the first RBNZ rate cut from February 2025 to November
2024.
Later
in the day we had the Reserve Bank of New Zealand’s own inflation
measure, their “sectoral factor model” for Q2. This came in at
3.6% y/y, well down from Q1’s 4.2% but, of course, well above the
top of the target band still.
US
politics remained centre stage. While the Trump convention continued
Bloomberg TV had an interview with him. Of note for those interested
in economic developments were Trump once again pledging sharply
higher tariffs. Of note for traders more specifically were Trump’s
remarks on not wanting any Federal Reserve interest rate cut until
after the election. The Financial Times headlined this with “Donald
Trump warns US Fed chair not to cut rates before the election”.
Trump says he does not want a boost given to the economy or Biden ahead of
the election. Will Federal Reserve Chair Powell succumb to the
threat? I don’t know.
Apart
from the NZD move today major FX rates were fairly subdued.
This article was written by Eamonn Sheridan at www.forexlive.com.
