CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

RBNZ dovish rate hike keeps Bird grounded - NZDUSD

November 24, 2021 1:57 AM

  1. Keep future annual inflation between 1 and 3 percent over the medium term, with a focus on keeping future inflation near the 2 percent mid-point

  2. Support maximum sustainable employment, considering a broad range of labour market indicators and taking into account that maximum sustainable employment is largely determined by nonmonetary factors

As mentioned in our preview yesterday, inflation is running at its highest level in a decade, and forward-looking indicators warn of further gains. Higher inflation was touched on several times in the statement, including the extract below.

“While the sources of higher inflation were largely as expected, the size of price movements were greater than anticipated.

The RBNZ expects inflation to peak at 5.7% in 4Q 2021 before falling back towards the 2% midpoint over two years. Earlier this month, the unemployment rate dipped to a record-equalling 3.4%, noted by the RBNZ as lower than sustainable. 

“We assess employment as being above its maximum sustainable level, with many of our labour market indicators near or at record levels”

Easing the need to raise by 50bp, the RBNZ noted that higher wholesale rates had resulted in tightening financial conditions and that higher wholesale rates are being passed on to both business and mortgage holders. 

“The 1-year mortgage rate has increased to around 130 basis points above its low this year. For longer-term fixed mortgages, increases have been larger. For example, the 5-year mortgage rate has risen 185 basis points from its lowest point this year.”

In the way of forward guidance, the RBNZ projects the cash rate to reach 2.00% by the end of 2022 and raised the OCR track to 2.6%, a little less than the 3.00% expected. 

All in all, a more dovish RBNZ than the market was braced for, and worth noting a lot can happen between now and the RBNZ’s next meeting on February 24th.

After heading into the meeting near .6950, the NZDUSD dropped to a low of .6915 before settling back near .6930. Bounces should be well contained towards resistance .6980/00 as traders look for a retest of the September .6860 low with scope to the August .6805 low.

Source Tradingview. The figures stated areas of November 24th, 2021. Past performance is not a reliable indicator of future performance.  This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation

How to trade with City Index

You can trade with City Index by following these four easy steps:

  1. Open an account, or log in if you’re already a customer 

    • Open an account in the UK
    • Open an account in Australia
    • Open an account in Singapore

  2. Search for the company you want to trade in our award-winning platform 
  3. Choose your position and size, and your stop and limit levels 
  4. Place the trade

 

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024