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☆ A Central Bank That Raised Rates Early Now Talks Up Recession
▼ + stars: | 2022-12-03 | by ( Stuart Condie | ) www.wsj.com time to read: 1 min

SYDNEY—New Zealand’s central bank was among the first in the developed world to raise interest rates to restrain a surge in inflation. Fourteen months on and the bank says it is now trying to cause a recession to bring prices under control. The Reserve Bank of New Zealand’s hard-line approach shows how difficult it can be for policy makers to tame inflation once it has become entrenched. It comes as the Federal Reserve and other central banks adopt a different strategy by pivoting toward smaller interest-rate rises, partly because they fear crashing their economies if they act too aggressively.

SummarySummary Companies G10 central banks deliver 350 bps of rate hikes last monthEmerging central banks tightened policy by 400 bpsHiking cycle coming to an end in many developing economiesLONDON, Dec 2 (Reuters) - The pace and scale of rate hikes delivered by central banks in November picked up speed again as policy makers around the globe battle decade high inflation. Central banks overseeing six of the 10 most heavily traded currencies delivered 350 basis points (bps) of rate hikes between them last month. The European Central Bank, the Bank of Canada, the Swiss National Bank and the Bank of Japan did not hold rate setting meetings in November. The latest moves have brought total rate hikes in 2022 from G10 central banks to 2,400 bps. "Central banks' determination to bring down inflation suggests that policy rates need to go higher still."

☆ NZ faces 'shallow' recession as rates need to rise more - senior central banker
▼ + stars: | 2022-11-28 | by ( Stella Qiu | ) www.reuters.com time to read: +3 min

SYDNEY, Nov 28 (Reuters) - New Zealand is likely facing a "shallow" recession as interest rates need to rise further to tame inflation, a top central banker said on Monday, suggesting that a pause in the policy tightening streak was still a distant prospect. The recession during the global financial crisis lasted six quarters and led to a total fall in GDP of around 4 percentage points. Silk said higher rates were justified by rising inflation expectations in New Zealand and the strength of the labour market which is driving wages higher. "If you look at some of the peak indicators of peak rates, for the Fed for example, that's very similar to our latest OCR track as well. Fed members have generally projected rates could rise as far as 5.0 to 5.25%, with some even expecting a higher peak.

☆ Dollar headed for weekly loss as investors brace for slower Fed hikes
▼ + stars: | 2022-11-25 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

The Japanese yen jumped roughly 0.7% overnight, and last bought 138.60 per dollar. Against a basket of currencies, the U.S. dollar index stood at 105.94, testing its three-month trough of 105.30 hit last week. read moreThe euro was 0.06% lower at $1.04045, but remained close to $1.0481, its highest level in over four months hit last week. The kiwi slid 0.19% to $0.6252, but that was not far off its three-month peak hit in the previous session. The New Zealand dollar was headed for a weekly gain of more than 1.5%, aided by the Reserve Bank of New Zealand's 75 bp rate hike earlier in the week and its hawkish rate outlook.

☆ We are unambiguously contractionary in our monetary position, says RBNZ
▼ + stars: | 2022-11-24 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailWe are unambiguously contractionary in our monetary position, says RBNZAdrian Orr of Reserve Bank of New Zealand discusses its biggest-ever rate hike of 75 basis points.

☆ RBNZ Governor says central bank policy now officially contractionary
▼ + stars: | 2022-11-23 | by ( Lucy Craymer | ) www.reuters.com time to read: +2 min

WELLINGTON, Nov 24 (Reuters) - New Zealand's central bank governor said on Thursday benchmark interest rates needed to go higher and the country also needed to go into recession to get spiralling inflation under control, which would mean pain for some home owners. As we've said before, inflation is no one's friend and causes economic costs," Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr told a committee at parliament. New Zealand's central bank raised its official cash rate by a record 75 basis points to a near 14-year peak of 4.25% on Wednesday as it struggles to contain inflation near three-decade high. The central bank surprised the market with its hawkish tone and forecast that rates would now peak at 5.5%, compared with a previous forecast of 4.1%. He added that the central bank committee realised it need to do more and sooner to break that spiral.

☆ New Zealand house prices forecast to drop 18% from peak
▼ + stars: | 2022-11-23 | by ( Vivek Mishra | ) www.reuters.com time to read: +3 min

Average house prices in the country rose by more than 40% at the height of the pandemic before reaching a peak in November last year at levels the Reserve Bank of New Zealand (RBNZ) said were unsustainable. Still, that fall would be tiny compared to the 250% rise in New Zealand house prices since 1998, almost four times the average increase across OECD countries. House prices have nearly doubled in the last seven years alone. Asked how much average house prices would fall from peak to trough, analysts who answered an additional question gave a median estimate of 18%, with forecasts in a 14%-23% range. But a lot needs to happen to better balance the housing market here with a horrible undersupply of houses," said Jarrod Kerr, chief economist at Kiwibank.

☆ Asia-Pacific stocks rise ahead of New Zealand rate decision, Fed minutes
▼ + stars: | 2022-11-23 | by ( Lee Ying Shan | ) www.cnbc.com time to read: 1 min

A pedestrians walks past the Reserve Bank of New Zealand headquarters in on Thursday, Aug. 9, 2018. New Zealand's central bank raised interest rates by 50 basis points to 2.0% on Wednesday, its fifth rate hike in a row as it seeks to get on top of inflation and signaled the cash rate would peak at a higher level than previously forecast. Shares in the Asia-Pacific rose Wednesday ahead of several economic data releases in the Asia-Pacific. New Zealand's central bank is expected to deliver a 75 basis point hike, according to a Reuters poll. The S&P/ASX 200 was up 0.87% despite the Reserve Bank of Australia governor Philip Lowe on Tuesday hinting at more rate hikes ahead.

☆ New Zealand's central bank raises rates by 75bps
▼ + stars: | 2022-11-23 | by ( Lucy Craymer | ) www.reuters.com time to read: 1 min

WELLINGTON, Nov 23 (Reuters) - New Zealand's central bank raised interest rates by 75 basis points to a near 14-year high of 4.25% on Wednesday and flagged more hikes to come as it struggles to contain stubbornly high inflation. Fifteen of 23 economists in a Reuters poll forecast the Reserve Bank of New Zealand (RBNZ) would move by 75 basis points, the ninth straight hike since it began tightening in October 2021. It now expects the cash rate to peak at 5.5% in September 2023, according to the monetary policy statement. Reporting by Lucy Craymer; Editing by Sam HolmesOur Standards: The Thomson Reuters Trust Principles.

☆ New Zealand's central bank will probably keep 'talking tough' on inflation, economist says
▼ + stars: | 2022-11-23 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailNew Zealand's central bank will probably keep 'talking tough' on inflation, economist saysDiana Mousina of AMP Capital says the Reserve Bank of New Zealand has been quite dovish in terms of its growth projections.

☆ Pay attention to upcoming Fed meetings, says UOB
▼ + stars: | 2022-11-23 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailPay attention to upcoming Fed meetings, says UOBHeng Koon How of United Overseas Bank discusses the Reserve Bank of New Zealand's hawkish 75 basis point interest rate hike.

☆ New Zealand delivers record rate hike, flags more to come
▼ + stars: | 2022-11-22 | by ( Lucy Craymer | ) www.reuters.com time to read: +3 min

The Reserve Bank of New Zealand (RBNZ) raised the official cash rate (OCR) by 75 basis points to 4.25%, its highest since January 2009. The RBNZ also increased the projected peak for the cash rate to 5.5% in September 2023 where it expects it to remain into 2024. The RBNZ has remained more hawkish than its Australia counterpart, which has slowed its rate increases in recent months. Wednesday's ninth straight hike means the cash rate has now risen 400 basis points since October 2021 and is the most aggressive tightening by the central bank since 1999 when the cash rate was introduced. Worrying the bank is non-tradeable inflation--or prices for goods that are not exposed to global markets--which is running at a record.

☆ Take Five: Black Friday test
▼ + stars: | 2022-11-18 | by ( ) www.reuters.com time to read: +5 min

1/GOING SHOPPINGWith concerns that the U.S. economy may be on the verge of a recession, a key test of consumer demand arrives on Nov. 25, when retailers launch "Black Friday" sales - a day traditionally marked by long lines of shoppers eager to pounce on discounts. Soaring inflation and surging interest rates could test buying appetite. The dollar index, meanwhile, peaked at a 20-year high of 114.78 in September and has been falling ever since. Reuters Graphics3/BLEAK OUT THEREThe International Monetary Fund says the global economic outlook is even gloomier than it was a month ago. Preliminary readings of business activity in November from a number of economies could answer the question in the coming days.

☆ New Zealand's RBNZ seen raising rates by historic 75 bps
▼ + stars: | 2022-11-17 | by ( Devayani Sathyan | ) www.reuters.com time to read: +3 min

Reuters Poll: RBNZ monetary policy outlookThe largest banks in the country - ANZ, ASB, Kiwi Bank, Bank of New Zealand and Westpac - expect a 75 bp hike on Wednesday, matching the recent pace of the U.S. Federal Reserve. "We are forecasting the OCR to peak at 5.0%, via another 75 bp hike in February on a 'let's just get it done' basis. If data cools more rapidly than expected the RBNZ could well slow the pace at that point." Rates were expected to peak at 4.75% and remain unchanged until the end of next year, according to the median view in the poll. According to the latest RBNZ survey, inflation is expected to ease only modestly over the coming year and will be higher than previously predicted.

☆ New Zealand central bank review supports monetary policy decisions
▼ + stars: | 2022-11-09 | by ( Lucy Craymer | ) www.reuters.com time to read: +2 min

WELLINGTON, Nov 10 (Reuters) - The New Zealand central bank's dramatic easing in monetary policy was largely warranted over the COVID-19 pandemic, but with hindsight policy tightening should have occurred earlier in 2021, an internal report released by the central bank on Thursday found. The internal review, which looked at how the Reserve Bank of New Zealand (RBNZ) made decisions about monetary policy in the past five years and what lessons could be learned, found monetary policy decisions were consistent with the data available at the time, while worst case scenarios were avoided. It did find with the benefit of hindsight that monetary policy should have been tightened earlier in 2021 either by lifting the cash rate or reducing asset purchases. New Zealand's central bank started an aggressive tightening cycle in October 2021 and has increased the cash rate in just over a year to 3.5% from 0.25%. Orr said in a statement that the period reviewed had been uniquely challenging and they could learn from the conduct of monetary policy.

REUTERS/Ricardo Moraes/File Photo/File PhotoLONDON, Nov 2 (Reuters) - The pace and scale of rate hikes delivered by central banks around the globe in October slowed down dramatically following September's historic peak. The latest moves have brought total rate hikes in 2022 from G10 central banks to 2,050 bps. Emerging markets interest ratesMarkets had recently taken heart from indications that rate hikes from major central banks - especially the U.S. Federal Reserve - were slowing down. "We see central banks on a path to overtighten policy," said Boivin on Monday in a weekly outlook note from the world's largest asset manager. "We think the Fed, like other developed market central banks, will only stop when the severe damage from rate hikes is clearer.

☆ Dollar sags as Fed decision looms; yen surges
▼ + stars: | 2022-11-02 | by ( Kevin Buckland | ) www.reuters.com time to read: +4 min

The yen outperformed, seeing a sudden burst of strength mid-morning Japan time, with traders on alert for possible intervention around the Fed meeting. On Wednesday, the Japanese currency jumped suddenly by about half a yen to 147.4 per dollar. The euro edged up 0.15% to $0.9888, but still close to the previous session's one-week low at $0.98535. Sterling rose 0.17% to $1.1505, but remained not far from Tuesday's one-week low of $1.14365. The Australian dollar was little changed at $0.63945, consolidating near a one-week low.

☆ New Zealand central bank can get inflation under control: RBNZ governor
▼ + stars: | 2022-11-02 | by ( Lucy Craymer | ) www.reuters.com time to read: +1 min

WELLINGTON, Nov 3 (Reuters) - New Zealand central bank Governor Adrian Orr said on Thursday he was confident the central bank can get inflation under control as the country battles a tight labour market. Inflation in New Zealand is currently sitting at 7.2%, well above the bank's target of 1% to 3%. Orr said the Reserve Bank of New Zealand (RBNZ) has a "laser-like" focus on controlling inflation. A tight labour market saw wage inflation in the third-quarter rise to the highest level since the survey began in 1993. Orr added that the tight labour market was also the biggest constraint on businesses in New Zealand.

☆ If 8% inflation is worrying, 3% could be worse
▼ + stars: | 2022-11-02 | by ( John Foley | ) www.reuters.com time to read: +3 min

But what if inflation doesn’t go back to 2%, and instead sticks somewhere higher, like 3%? Some measures suggest that inflation is coming down, such as the sharp drop in how long it’s taking manufacturers to get deliveries. For a central bank, the nightmare scenario is one where inflation subsides to a level above its target and then plateaus. Some Democrats already argue the Fed’s rate hikes hurt the poor; some Republicans blame Powell for letting inflation run amok in the first place. Rate hikes could trigger a recession, a state that’s painful but has tended to bring inflation down quickly in the past.

☆ RBNZ says global financial stress will test New Zealand's financial resilience
▼ + stars: | 2022-11-01 | by ( Lucy Craymer | ) www.reuters.com time to read: +1 min

WELLINGTON, Nov 2 (Reuters) - The Reserve Bank of New Zealand said on Wednesday the country's financial system is as a whole resilient but global financial stress will test this. "The rising global interest rates necessary to curb inflation will test New Zealand's financial resilience," Governor Adrian Orr said in the bank's financial stability review, which is released twice a year. "While our financial system as a whole is resilient, some households and businesses will be challenged by the rising interest rate environment," Orr added. New Zealand's central bank has aggressively hiked interest rates as it has sought to get on top of a red-hot housing market and soaring inflation. The central bank, however, said house prices remain above their sustainable level, and that a further gradual decline would be positive for long-term financial stability.

Oct 31 (Reuters) - The Reserve Bank of New Zealand said on Monday its annual stress test on the banking sector showed banks were "well placed" to overcome stagflation. The RBNZ's Deputy Governor Christian Hawkesby said while banks' capital buffers would take a hit in a stagflation scenario, where high inflation is paired with negative economic growth, they would remain well above the regulatory minimums. Inflation in New Zealand is tracking just below three-decade highs at 7.2% and the central bank has been aggressively hiking the cash rate to try to dampen it. Gross domestic product rose 1.7% in the June quarter, but increases in the cash rate raise the risk of a contraction. The Central Bank is due to release its twice yearly Financial Stability Report on Nov. 2.

☆ Aggressive rate hikes the name of the game for big central banks
▼ + stars: | 2022-10-27 | by ( ) www.reuters.com time to read: +5 min

LONDON, Oct 27 (Reuters) - The European Central Bank delivered a second straight 75-basis-point interest rate hike on Thursday, the latest sign that major central banks are serious about curbing hot inflation. Central banks in the 10 big developed economies have raised rates by a combined 2,165 basis points (bps) in this cycle to date, with Japan the holdout "dove." But the pace of these rate rises is starting to slow - Canada just delivered a smaller-than-anticipated rate hike. That would be the fourth straight rate increase of that magnitude, bringing the policy rate to the 3.75%-4.00% range as part of what has been the sharpest set of U.S. rate increases in about 40 years. Reuters Graphics7) SWEDENSweden's central bank raised its key rate on Sept. 20 by a larger-than-expected one percentage point to 1.75%.

British Pound Sterling and U.S. Dollar notes are seen in this June 22, 2017 illustration photo. The U.S. dollar held at a 32-year peak against the yen and rose from a two-week trough against a basket of major peers, underpinned by expectations of aggressive U.S. Federal Reserve interest rate hikes. “Sterling edged lower against its peers after yet another upside surprise in the latest UK inflation data... “Following the budget fiasco, there is also a great deal of uncertainty as to the pace of upcoming Bank of England interest rate hikes," he added. read moreElsewhere, the dollar pushed as high as 149.48 yen for the first time since August 1990 in early London trading.

☆ FOREX Dollar holds near 32-year peak vs yen despite intervention risks; sterling licks wounds
▼ + stars: | 2022-10-19 | by ( Kevin Buckland | ) www.reuters.com time to read: +5 min

The dollar pushed as high as 149.395 yen overnight for the first time since August 1990, before last trading at 149.305 in the Asian session. read moreThe dollar index - which measures the currency against six peers including the yen, sterling and euro - added 0.2% to 112.19, after dropping to the lowest since Oct. 6 at 111.76 overnight. Meanwhile, sterling was little changed at $1.1318, licking its wounds after a 0.34% decline in the previous session. Economists in a Reuters poll predict another 75 basis-point rate hike from the European Central Bank on Thursday of next week. The currency last traded 0.08% higher at $0.56905, close to the previous session's two-week high of $0.5719.

☆ Most Asian shares extend rally, markets await UK inflation data
▼ + stars: | 2022-10-19 | by ( Stella Qiu | ) www.reuters.com time to read: +4 min

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) edged up 0.2%, but further gains were capped by slight falls in Chinese shares. Japan's Nikkei (.N225) advanced 0.4%, Australia's resources-heavy shares (.AXJO) gained 0.4%, while South Korea (.KS11) rebounded 0.5%. Register now for FREE unlimited access to Reuters.com RegisterU.S. S&P 500 futures rose 0.8% and the Nasdaq futures jumped 1.3%. Netflix Inc (NFLX.O) reversed customer losses that had hammered its stock this year and projected more growth ahead, sending shares 14% higher in after-hours trading. Chris Turner, global head of markets at ING, said a quiet week for U.S. data could also see the dollar correction extend a little.

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