RBNZ to keep rates on hold

11 February, 2019

The week ahead will see the RBNZ holding its monetary policy meeting. Interest rates in New Zealand should remain unchanged at this week’s meeting. On the economic front, GDP will form the dominant theme this week.

The UK will be releasing its advance quarterly GDP report for the fourth quarter of 2018. Manufacturing, industrial and construction output reports will come out as well. The data will be key as it will provide further insights into how the UK economy fared as it heads closer to the Brexit deadline.

Japan will also be releasing its preliminary GDP report for the fourth quarter of 2018. Japan’s GDP contracted 0.6% in the third quarter of the year, but economic activity should expand in the fourth quarter of the year.

The Eurozone’s GDP estimates are on the tap this week. GDP should show a 0.2% increase during the quarter ending December.

Data from the United States this week will see the producer prices index data coming out followed by the retail sales report.

Here’s a quick recap of what’s to come in the currency markets this week.

UK fourth-quarter GDP forecast to slow


Data from the U.S. will see the advance GDP report for the fourth quarter of 2018 coming out. According to initial estimates, the fourth quarter economy should increase by 2.6% in the three months ending December 2018. On a quarterly basis, the GDP should advance just 0.3% marking a decline from the 0.6% growth registered in the third quarter.

This marks a relative slowdown compared to a 3.4% increase in the third quarter of the year. The fourth quarter GDP will mark a second consecutive quarterly decline in the pace of economic expansion.

Besides the GDP figures, the retail sales numbers will be coming out over the week followed by the monthly durable goods orders report. Retail sales might increase by 0.1% on the month in December.

The Institute of Supply Management’s non-manufacturing PMI will also be coming out this week. In December, the non-manufacturing PMI fell to 57.6 on the index, following an increase to 60.7 in November.

RBNZ expected to leave interest rates unchanged


The Reserve Bank of New Zealand will be holding its monetary policy meeting this week. The central bank might leave the official cash rate unchanged at 1.75%. The wait and watch mode from the RBNZ is likely to continue as policymakers wait and assess more economic data.

Latest economic reports from New Zealand showed that inflation during the fourth quarter of the year increased by 0.1%. The fourth quarter inflation beat estimates of a flat reading, but consumer prices slowed from 0.9% from the previous quarter.

On a year over year basis, New Zealand’s inflation rate increased by 1.9% in the fourth quarter of the year. This was the highest level in inflation since the past five quarterly periods. Most recent data showed that the quarterly employment change was weaker than expected. The unemployment rate ticked higher while the quarterly employment change grew just 0.1%.

Following the release of the RBNZ’s statement, the quarterly inflation expectations report will be coming out.

Japan’s preliminary Q4 GDP to show a 0.4% increase


Japan’s fourth-quarter GDP report will come out this week. Data released will be the preliminary release. Economists polled forecast that the fourth quarter GDP will rise by 0.4%. This marks an expansion in the fourth quarter after GDP fell 0.6% in the three months ending September 2018.

The GDP price index data should drop 0.4% on the quarter which would mark a steeper decline following a 0.3% fall in the previous quarter.


Source link  
Trump Hits Mexico With Trade Tariffs

In a shift of focus from China, the Trump administration slapped Mexico with trade tariffs. The administration announced that it will impose...

USD maintains mains on growing cautious

The US dollar index held strong on Wednesday amid a mixed sentiment in the market. The 10-year Treasury yields hit a fresh 20-month low while equity...

Volatility could pick up as markets open

Lack of economic news or developments within the global themes played on the currency markets on Monday. With the US and UK markets closed on Monday...


Markets open to a slow trading day

Following a volatile week, we start today with both the US and UK markets closed due to bank holidays. This leaves most of the heavy lifting to the...

FOMC Minutes Urge Patience

The Federal Reserve released the monetary policy meeting minutes late yesterday. The minutes revealed that policymakers were committed to keeping...

New Zealand Retail Sales Rises 0.7% In Q1

The latest retail sales report from New Zealand saw a modestly better print than expected. Quarterly retail sales rose 0.7% beating estimates of a 0.6% increase...


Markets Open On A Soft Note

Lack of economic data and fresh trade rhetoric saw the markets trading rather subdued on Monday. The US dollar index was trading flat although price remains...

Japan's Q1 GDP Rises 0.5%

Beating estimates, Japan's first-quarter GDP grew at a pace of 0.5%. On a year over year basis, Japan's GDP advanced 2.1% during the January...

USD Steady at a Two-Week High

The US dollar was seen holding on to the gains, settling near a two-week high by Thursday's close. The gains came as the trade tensions eased and focus...

  


Share it on:   or