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NZD Interest Rate Statement

  • #21
  • Jan 24, 2007 2:47pm Jan 24, 2007 2:47pm
is there a statement released with this showing a vote on how many nays and yas for hike like in BreatBritain? Or do u just have to read it and figure it out?
Ghost Swoopen in for my pips while no one is lookin !!
  • #22
  • Jan 24, 2007 2:56pm Jan 24, 2007 2:56pm
There is is a statement by the RBNZ Governor..... I think its a question of just reading it and figuring it out.. I dont know of any vote indications

Text Of NZ Central Bank Jan Official Cash Rate Statement
The following is the text of a statement from Reserve Bank of New Zealand Governor Alan Bollard at Thursday's Official Cash Rate Review. The Official Cash Rate (OCR) will remain unchanged at 7.25%.
Reserve Bank Governor Alan Bollard said: "While indicators show that economic growth was continuing to moderate in the third quarter of 2006, it is increasingly apparent that domestic demand has rebounded since then, with retail trade picking up, a resurgent housing market and consumer and business confidence recovering strongly.
"The main drivers appear to be the decline in petrol prices since last October, a pickup in net immigration and an expansionary fiscal policy.
"At the same time, headline inflation has reduced as a result of the lower oil prices and the strengthening of the exchange rate in the fourth quarter. Annual CPI inflation fell to 2.6% in December and is projected to decrease considerably further through 2007, thus helping to lower inflation expectations. But the medium-term outlook is less rosy, with annual rates of inflation projected to return to the upper part of our target range through 2008 and into 2009.
"While the near-term inflation outlook is relatively benign, we remain concerned about the upside risks to medium-term inflation. In particular, our assumption that the housing market and consumer demand will resume their slowing trend over 2007 and 2008 is looking more uncertain, particularly if further fiscal expansion occurs.
"In the absence of clear indications of a moderation in housing and domestic demand, it is likely that further policy tightening will be required. The situation will be reassessed in the light of a full review of our economic forecasts at the March Monetary Policy Statement. A return to a moderating trend in housing and domestic demand will be essential if we are to see a reduction in medium-term inflation pressures."
  • #23
  • Edited 4:39pm Jan 24, 2007 3:23pm | Edited 4:39pm
It's obviously a hawkish statement, more so than the market was expecting, so the currency reaction is not a surprise at all - interest rates are not going to be lowered, so into the carry-trades again lads...lol.

The RBNZ is clearly still very concerned about inflation, particularly in the housing sector

There is no vote ....someone can correct me if I'm wrong, but there is a committee who advise the Governor, but he takes the decision himself
  • #24
  • Jan 24, 2007 4:31pm Jan 24, 2007 4:31pm
Of course they would write it Hawkishly. A Hawkish statement paints a growing economy; would you like your leader to say: "our economy is dwindling and a rate hike is not to the best interest of our country"...

Why NZD strengthen is beyond me. To those who made money, two thumbs up for having the guts to gamble it.
  • #25
  • Jan 24, 2007 4:46pm Jan 24, 2007 4:46pm
I've edited my post to make it easier for you to understand. Take a breath and read it a couple more times....

Yes, astounding as it may seem, the RBNZ has been known to reduce interest rates in the past, and accompany these moves with dovish statements. Monetary policy management is a two-sided coin.
  • #26
  • Jan 24, 2007 7:00pm Jan 24, 2007 7:00pm
The whipsaw could probably be just a way for the crap brokers/big money traders to screw traders who sold NZD on the no-rate-hike thinking its NZD negative.

Now that NZD spiked up, it was said that Japanese sold the NZD at the top grabbing the money on the table.
  • #27
  • Jan 24, 2007 8:35pm Jan 24, 2007 8:35pm
Quoting don perry
I notice that the GBP(AUD and NZD) pairs are very volatile to news. THe AUD CPi gave GBPAUD a 300 pip move lastnight. I never saw something like that before.

now NZD interest rate came out steady regardless of low cpi and retail sales. even though rates are steady. the GPBNZD went up 70 pips. then plummets to 200 pips+ below the top of the spike.

imagine if the rate was hiked

Which brokers offer both of these pairs of GBP/AUD and GBP/NZD?
  • #28
  • Mar 7, 2007 6:42am Mar 7, 2007 6:42am
well , we have it again, this time there will be probably a move, we're going to see but who knows, what will happened, if they hike, what will happened? No idea , but it seems if they dont hike, we'll see a good move going down nzdusd, any thought if they hike what will happen?
  • #29
  • Mar 7, 2007 7:23am Mar 7, 2007 7:23am
Quoting mohsen57
well , we have it again, this time there will be probably a move, we're going to see but who knows, what will happened, if they hike, what will happened? No idea , but it seems if they dont hike, we'll see a good move going down nzdusd, any thought if they hike what will happen?
I was thinking the same thing - if no hike I think NZD will head south with a huge move. General consensus is rates will be raised for the first time since Dec 2005 - 13 out of 14 analysts interviewed by Bloomberg confirm this view. But seeing as a hike is widely expected - will it cause any major movement? Maybe we'll have to wait and see... Anyone??
  • #30
  • Mar 7, 2007 8:36am Mar 7, 2007 8:36am
Quoting forexprincess
I was thinking the same thing - if no hike I think NZD will head south with a huge move. General consensus is rates will be raised for the first time since Dec 2005 - 13 out of 14 analysts interviewed by Bloomberg confirm this view. But seeing as a hike is widely expected - will it cause any major movement? Maybe we'll have to wait and see... Anyone??
I go for NZDJPY on the hike. Big looser during this carry speculation. There is room to go up.
  • #31
  • Mar 7, 2007 8:56am Mar 7, 2007 8:56am
I agree with cesarnc and I quote this piece:

Quote
NZD: Hit hard in the recent carry unwinding and increased risk aversion, the
NZD dropped 5% on a trade-weighted basis in just over a week and by over
8% vs the JPY to strong technical support level at 77.50. However, the yield
differential between the NZD and most majors, particularly the JPY, remains
attractive. In its December Monthly Policy Statement, the RBNZ noted that
in absense of clear indications of a moderation in housing and domestic
demand, it is likely that further policy tightening will be required. In January,
governor Bollard noted he had underestimated the strength of the housing
market and domestic demand. Indeed, house prices remain elevated, the
labour market is tight (3.7% unemployment rate in Q4) and consumer
spending remains strong (+1.8% in Q4). On the other side CPI has come
down in Q4 to 2.6% compared to 3.5% in Q3. The market has priced in a
hike by 25bp to 7.50% today, which if delivered will increase the
attractiveness of the NZD to investors such as the Japanese. The RBNZ may
find it easier to decide to hike rates today due to recent NZD weakness.
Equity and FX markets including NZD/JPY seem a little more stable now and
we reiterate strong technical support in NZD/JPY at 77.50. Slowly, but warily
investors will edge back into the kiwi providing there are no sudden
reversals. If the RBNZ unexpectedly decides to keep rates on hold, expect
another wave of high-yield selling and JPY gains as positions are cut further.

I wonder why every analyst expects a rate hike?
  • #32
  • Mar 7, 2007 9:21am Mar 7, 2007 9:21am
Quoting BurgerKing
I wonder why every analyst expects a rate hike?
Right behind you...

[NZD/USD] is trading a fairly subdued range ahead of the RBNZ policy announcement and statement later tonight. A 25bp hike is widely expected, with the statement expected to suggest that further tightening will be/may be required. Local names look to sell the post-RBNZ rally as some mull the potential end of the tightening cycle. Indeed, one Swiss name has made the bold suggestion of a no-change decision from the CB tonight, given the moderating in housing and domestic demand. Long Aud/Nzd positions have been recommended on the back of this. The headline trades a 0.6820-50 range for now, with US investment bank demand noted up to the highs before UK clearer sales capped trade.

It's gonna be fun, either way... Well, bored as I am with Cable....
  • #33
  • Mar 7, 2007 10:35am Mar 7, 2007 10:35am
Quoting cesarnc
Right behind you...

[NZD/USD] is trading a fairly subdued range ahead of the RBNZ policy announcement and statement later tonight. A 25bp hike is widely expected, with the statement expected to suggest that further tightening will be/may be required. Local names look to sell the post-RBNZ rally as some mull the potential end of the tightening cycle. Indeed, one Swiss name has made the bold suggestion of a no-change decision from the CB tonight, given the moderating in housing and domestic demand. Long Aud/Nzd positions have been recommended on the back of this. The headline trades a 0.6820-50 range for now, with US investment bank demand noted up to the highs before UK clearer sales capped trade.

It's gonna be fun, either way... Well, bored as I am with Cable....
I agree with you cesarnc - it's going to be fun - and a no hike would be awesome. I guess we will know in 3 1/2 hours
  • #34
  • Mar 7, 2007 12:49pm Mar 7, 2007 12:49pm
Quoting forexprincess
I agree with you cesarnc - it's going to be fun - and a no hike would be awesome. I guess we will know in 3 1/2 hours
Good luck to us all...
  • #35
  • Mar 7, 2007 12:54pm Mar 7, 2007 12:54pm
If you wait 3.5 hours you'll miss the party. I show it happens in 1 hour

Quoting cesarnc
Good luck to us all...
T
  • #36
  • Mar 7, 2007 1:00pm Mar 7, 2007 1:00pm
I have no special source for information, but NZ has been having economic problems for a long time and its only hope is to attract outside investment. One of the better ways, and the way they have used in the past, has been to increase the interest rate to make NZD more attractive to outside interests, hence their heave involvement in the carry trade.

Given their economic situation, the most sensible course for their CB will be to increase the rate. There would be no advantage to their to hold the rate steady at this point. It would also be beneficial, at least on the short term, to indicate that further increases are to be expected.
  • #37
  • Mar 7, 2007 1:03pm Mar 7, 2007 1:03pm
Something popped up at FXCM's Order Board:

Quote
[IFR Forex Watch]
[ORDERS BOARD]

[18:53 GMT Mar 7] [USD/BRL] Buy USD stops 2.1325 and 2.1525.

[18:52 GMT Mar 7] [USD/CHF] Stops at 1.2190 and 1.2265.

[18:52 GMT Mar 7] [USD/MXN] Stops 11.1200 and 11.2650

[18:37 GMT Mar 7] [NZD/USD] Offers at 0.6860 with bids at 0.6830.

[18:36 GMT Mar 7] [EUR/USD] Bids at 1.3130/35 and 1.3105/10 with offers at
1.3155/60 and 1.3170/75.

[18:35 GMT Mar 7] [USD/JPY] Offers at 116.70 and 116.90/117.00. Bids from
116.20/25 from Japanese names with more buyers at 116.10 and 116.00.

[18:35 GMT Mar 7] [GBP/USD] Bids at 1.9260 & 1.9280 with offers at 1.9325 and
1.9350/60.

If the above is true, then NZDUSD has a resistance at 0.6860. As of this writing, 1 hr before RBNZ decision, it is almost 0.6850.. An upmove is very limited to just 10 pips!!! Thats not fun to take the long NZD side.
  • #38
  • Mar 7, 2007 1:03pm Mar 7, 2007 1:03pm
The question I guess -is the rate hike baked into the cake. Maybe we'll see a retail spike and fade trade.

Quoting moonchild
I have no special source for information, but NZ has been having economic problems for a long time and its only hope is to attract outside investment. One of the better ways, and the way they have used in the past, has been to increase the interest rate to make NZD more attractive to outside interests, hence their heave involvement in the carry trade.

Given their economic situation, the most sensible course for their CB will be to increase the rate. There would be no advantage to their to hold the rate steady at this point. It would also be beneficial, at least on the short term, to indicate that further increases are to be expected.
T
  • #39
  • Mar 7, 2007 1:09pm Mar 7, 2007 1:09pm
Only worth playing if they dont raise or raise by 50bps. Both very unlikely imo. But will be 80pip+ moves if either occur.
Forex rules
  • #40
  • Mar 7, 2007 1:11pm Mar 7, 2007 1:11pm
Quoting moonchild
I have no special source for information, but NZ has been having economic problems for a long time and its only hope is to attract outside investment. One of the better ways, and the way they have used in the past, has been to increase the interest rate to make NZD more attractive to outside interests, hence their heave involvement in the carry trade.

Given their economic situation, the most sensible course for their CB will be to increase the rate. There would be no advantage to their to hold the rate steady at this point. It would also be beneficial, at least on the short term, to indicate that further increases are to be expected.
However, raising Interest Rates = Increase Value of NZD = Export becomes expensive = Less Local Economic activity.

Some months back, NZ government is very furious of the NZDJPY carry traders that is driving NZD up a high official (PM or Bollard) went to Japan to bash the carry traders to no avail. The NZ Government wants the NZD to go down to 0.60x to make it attractive to business. If I remember it clearly, someone joked saying "What is the capital of NZ? Oh about 60 cents.." in that thread...
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