First Impressions: RBNZ Monetary Policy Statement May 2023

The RBNZ tightened by 25 points to 5.5 percent and expressed confidence that this will be sufficient to bring inflation back to target. We continue to see risks that the large migration surge will ultimately require more action after July.

NZD/USD: RBNZ Less Hawkish Tilt Reinforces USD Bulls

The New Zealand dollar, NZD is the weakest currency against the US dollar in today’s Asian session as it tumbled by -1.10% at this time of the writing reinforced by post-RBNZ, the New Zealand central bank’s monetary policy decision to hike as expected by 25 basis points (bps) to bring the official cash rate to 5.50%, the highest level since December 2008.

Debt Ceiling Anxiety Grows

US: Talks to solve the debt ceiling problem continued yesterday showing some progress, but no result. Meanwhile anxiety in the Treasury bills market grows with front-end bills briefly topping 6% yesterday. The market eyes 1 June as the potential X-date, when the US government risks running out of money. The yield on the Treasury bill maturing 1 June rose 2.5pp above the yield on the bill maturing 30 May yesterday.

RBNZ Seemingly Done But UK Inflation Data Shows BoE Has A Lot To Do

The headline UK inflation number may look like a massive step in the right direction in April but the reality is that there's far more to be concerned about in the report than happy. On the one hand, inflation has slipped significantly from 10.1% to 8.7% but unfortunately, that's where the good news starts and ends.

Spotlight on PCE Inflation and Fed Minutes after Powell Hints at Pause

As Fed officials contemplate whether to pause or not, some vital inflation data will be watched on Friday (12:30 GMT) in the form of the core PCE price index, while the minutes of the May FOMC meeting (Wednesday, 18:00 GMT) might further stir things up in the pause debate. One thing is clear though – the Fed has never been so data dependent and the June decision will likely be a very close call. So what should we expect from the incoming data and are there more gains in store for the US dollar?

Crypto Hits the Ceiling

The crypto market lost 1.8% over the past 24 hours to $1.120 trillion, returning to Monday’s levels. The growth momentum of the previous day was not supported by the new portion of bad news about the debt ceiling, which launched a pull from risky assets.

GBP/USD Dips after Disappointing UK Inflation

GBP/USD is down for a third straight day, trading at 1.2374, down 0.33%. Earlier, GBP/USD touched a low of 1.2369, its lowest level since April 18th. The FOMC releases the minutes of the May meeting later today.

Above-Expected Inflation Failed to Impress Pound Buyers

Another release of UK consumer inflation well above expectations has failed to take the issue off the country’s agenda. The report for April showed a 1.2% rise in consumer prices, compared to the 0.8% that markets were expecting this time and the previous month. Annual inflation slowed from 10.1% to 8.7% (8.2% was expected). This is a 13-month low, but still above the peak inflation levels in the early 1990s, when it was barely above 8% y/y.

ETHUSD Analysis: Hong Kong to Open Cryptocurrency Trading to Retail Investors

The Hong Kong Securities and Futures Commission (SFC) announced on May 23 that rules for retail investors to trade cryptocurrencies on licensed exchanges will come into effect on June 1. It also became known that 152 applications have already been received from key industry players, professional associations and consulting firms.

Euro Steady Despite Weak Business Confidence Data

Germany’s Ifo Business Climate for May fell to 91.7, following a downwardly revised 93.4 in April and shy of the estimate of 93.0 points. This was the first decline after a six-month expansion. Business expectations fared worse, dropping from 91.7 to 88.6 and missing the estimate of 91.9 points.