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On June 17, Ding Xiangqun, Director of the State Financial Regulatory Commission, stated that the Commission will strictly enforce market discipline, thoroughly rectify disorderly competition, severely crack down on financial black and gray industries, firmly promote the integration of reporting and implementation in the insurance industry, effectively safeguard the order of the financial market, urge financial institutions to firmly establish correct business, performance, and risk perspectives, improve governance mechanisms, strengthen incentives and constraints, and shift from pursuing speed and scale to focusing on quality and efficiency.Pan Gongsheng, governor of the Peoples Bank of China, said that the short-term interest rate control mechanism will be improved.The "Shanghai International Financial Center Development Offshore Finance Action Plan" was officially released.According to the official measurement of the China Earthquake Networks Center, a 4.1-magnitude earthquake occurred at 10:06 on June 17 in Haixi Prefecture, Qinghai Province (37.85 degrees north latitude, 95.55 degrees east longitude), with a focal depth of 10 kilometers.On June 17th, Jarden economists warned that the Reserve Bank of Australia (RBA) cannot accelerate the natural decline of inflation by adjusting interest rates. In their research report, they pointed out that the composition of inflation is more important than its level, and they expect core inflation to remain above 3% until the second half of 2027. They noted that the main reason for the significantly higher-than-expected inflation rate is not an overheated domestic economy, but rather related to fuel costs, which are beyond the control of officials or politicians. This situation should ease as the situation in the Middle East normalizes, but Jardens core concern is the extent to which cost pressures will affect Australian goods and services.

AUD/NZD strengthens above 1.0800 as focus shifts to RBA Lowe's speech and RBNZ policy

Daniel Rogers

Nov 22, 2022 14:59

截屏2022-11-22 上午10.03.22.png 

 

In the early Tokyo session, the AUD/NZD pair is displaying inventory accumulation between 1.0810 and 1.0830. Investors have shifted their focus to Reserve Bank of Australia (RBA) Governor Philip Lowe's speech, which has caused the asset to swing unpredictably. The primary impetus for the cross will be the Reserve Bank of New Zealand's (RBNZ) interest rate decision on Wednesday.

 

Investors await the RBA policymaker's speech in order to get an informed opinion. The speech will include interest rate suggestions to counteract the exceptional increase in inflationary pressures. Third-quarter inflation hit 7.3%, compelling the Australian central bank to lift its price growth projection to 8%. To preserve healthy economic prospects and achieve price stability, the RBA maintained its rate hike timetable at 25 basis points (bps).

 

On the kiwi front, the Reserve Bank of New Zealand's (RBNZ) monetary policy statement will deepen policy divergence between the RBNZ and the RBA. Governor Adrian Orr of the Reserve Bank of New Zealand (RBNZ) has already announced five consecutive rate hikes of 50 basis points (bps) to a current level of 3.5 percent and has no plans to pause rate hikes despite rising inflationary pressures.

 

The Official Cash Rate (OCR) will climb by 75 basis points (bps) this time, according to a Reuters survey of the RBNZ's rate hike estimates. A comparable scenario would cause the OCR to increase to 4.25 percent and depart significantly from the RBA's policy structure.

 

The decision may boost the New Zealand Dollar in the future, but reduces the Reserve Bank of New Zealand's room for future rate increases. In addition, additional economic dynamics requirements will be shifted into the future.

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