Australian shares are set for a muted open after US stocks stumbled into their close before the release of June CPI data. Oil drops. Follow updates here.
The Reserve Bank of New Zealand’s policy decision is expected at 12pm AEST, and the central bank is expected to extend its interest rate rising cycle.: “We expect the RBNZ to hike the OCR 50bps to 2.50 per cent. ANZ and NZIER Pricing Intentions remain elevated and the Monthly Employment Indicator suggests the labour market continues to tighten. As such it’s too early for the Bank to take its foot off the pedal despite business profitability and consumer sentiment painting a downbeat outlook.
“In May, the statement noted that “employment remains above its maximum sustainable level”, which was generating upward pressure on wages and constraining output. We expect them to again suggest that “raising the OCR by more and sooner was consistent with avoiding higher future costs.” Forward rates imply further 50bp moves at the August and October meetings and rates plateauing at close to 4.0 per cent from early-2023.
“As RBNZ OIS markets are already fully pricing in a 50bp hike for this meeting, the market impact should be limited and focus should remain on their future guidance. Consensus inflation expectations, for 2022 and 2023, have climbed about 50bp since the last meeting but downward revisions to growth have been larger, at about 90bp. Weak data coupled with the reassessment of terminal rates across DM have triggered an 85bp drop in terminal rates expectations to about 3.9 per cent from 4.
“Better risk sentiment could boost the NZD but it will likely lag the AUD. 10y NZGB yields fell 5bp last week, in contrast to the 9bp move higher in 10y USTs.”
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
ASX LIVE: ASX to rise, Wall St lower on earnings angstAustralian shares are set to edge higher, though US losses could check the advance. $A drops. Copper, iron ore fade on China concerns. Follow updates here.
Read more »
ASX LIVE: ASX to rise, Wall St lower on earnings angstAustralian shares to edge higher; Viva first-half sales volumes increase; MyDeal beats FY22 guidance; Spark to sell 70pc of TowerCo business for $NZ900m. Follow updates here.
Read more »
ASX LIVE: Australian shares poised to open higher, $A edges upAustralian shares trading down 0.5pc at midday, markets brace for red-hot US inflation data, EML boss resigns, successor appointed, Costa pauses trading, follow for updates.
Read more »
ASX LIVE: Australian shares poised to open higher, $A edges upAustralian shares are set to open higher, RBNZ decision, US CPI, June jobs top agenda, follow for updates.
Read more »
ASX falls as Wall Street flat after strong jobs report, EML plunges as chief executive resignsAustralian shares have started the day lower as investors are nervous about surging inflation and prospects of a renewed global rate hike cycle.
Read more »
Short sellers raise bets against ASX retailers, lithium playsNearly 10 per cent of shares in Afterpay-owner Block are shorted, while analysts are scrambling to reduce profit forecasts for retailers ahead of their profit reports.
Read more »