NZ inflation and the responses (read from the bottom up for the chronology):
Other:
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:
