DIRS.INFO The most relevant business & tech news

Feb 22 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever. Wall Street and world stocks had their worst day this year after purchasing managers index data showed that the U.S. services sector is roaring back to life. Stocks slumped, volatility and the dollar rose, the two-year Treasury yield neared November's post-2007 peak, the implied U.S. terminal rate rose to a new high of 5.36%, and a potential 50 basis point rate hike next month is coming on traders' radar. As analysts at Schroders put it: "A new regime in policy and market behavior is unfolding before our eyes." If the dollar and U.S. yields continue to rise, one of this year's consensus trades and the allocation of hundreds of billions of dollars to emerging markets will have to be revised.

☆ Dollar edges down from six-week peak, Swedish crown jumps
▼ + stars: | 2023-02-20 | by ( Samuel Indyk | ) www.reuters.com time to read: +3 min

The U.S. dollar index , which measures the dollar against six other major currencies, slipped 0.2% to 103.81. Hawkish comments from Fed officials have also underpinned the U.S. dollar, as they signalled interest rates would need to rise to quash inflation. The euro fell 1.1% against the Swedish crown to 11.05 crowns while the dollar was down 1% to 10.3405. The euro was little changed against the dollar at $1.0690, just above Friday's six-week low of $1.06125. The Australian dollar rose 0.6% to $0.6918 ahead of minutes from the Reserve Bank of Australia's latest policy meeting on Tuesday.

☆ Dollar edges lower from six-week peak, Swedish crown jumps
▼ + stars: | 2023-02-20 | by ( Samuel Indyk | ) www.reuters.com time to read: +3 min

The U.S. dollar index , which measures the dollar against six other major currencies, slipped 0.1% to 103.91. Hawkish comments from Fed officials have also underpinned the U.S. dollar, as they signalled interest rates would need to rise to quash inflation. The euro fell 1.1% against the Swedish crown to 11.059 crowns while the dollar was down 0.8% to 10.3604. The euro was little changed against the dollar at $1.0687, just above Friday's six-week low of $1.06125. "Euro rates are probably likely to stay at higher levels, whereas we think dollar rates will more easily turn lower," Turner added, which he said could support the euro in the first half of the year.

It hit a six-week high of 104.67 on Friday. Hawkish comments from Fed officials have also underpinned the U.S. dollar, as they signalled interest rates would need to go higher in order to successfully quash inflation. The RBNZ is expected to scale down its tightening campaign only slightly, with a half-point interest rate increase to 4.75%. "With inflation so high ... not staying the course could mean even higher interest rates are required down the track," said analysts at ANZ. The offshore yuan was last marginally higher at 6.8643 per dollar, while the onshore yuan last bought 6.8580 per dollar.

☆ Dollar steady as robust U.S. data keep Fed hawks in control
▼ + stars: | 2023-02-20 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

Hawkish comments from Fed officials have also underpinned the U.S. dollar, as they signalled interest rates would need to go higher in order to successfully quash inflation. The kiwi fell 0.07% to $0.6238, with eyes on the Reserve Bank of New Zealand's (RBNZ) interest rate decision on Wednesday. The RBNZ is expected to scale down its tightening campaign only slightly, with a half-point interest rate hike to 4.75%. "With inflation so high ... not staying the course could mean even higher interest rates are required down the track," said analysts at ANZ. The offshore yuan was last marginally lower at 6.8741 per dollar, while the onshore yuan last bought 6.8657 per dollar.

☆ Dollar buoyant as robust U.S. data keep Fed hawks in control
▼ + stars: | 2023-02-20 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

"For the week ahead, the dollar can track higher given the recent run of economic data which supports the narrative of higher-for-longer interest rates," said Carol Kong, a currency strategist at Commonwealth Bank of Australia (CBA). Hawkish comments from Fed officials have also underpinned the U.S. dollar, as they signalled that interest rates will need to go higher in order to successfully quash inflation. The kiwi slipped 0.17% to $0.6232, with eyes on the Reserve Bank of New Zealand's (RBNZ) interest rate decision on Wednesday. The RBNZ is expected to scale down its tightening campaign only slightly, with a half-point interest rate hike to 4.75%. "With inflation so high ... not staying the course could mean even higher interest rates are required down the track," said analysts at ANZ.

☆ Disasters lower outlook for New Zealand interest rate rise
▼ + stars: | 2023-02-20 | by ( Lucy Craymer | ) www.reuters.com time to read: +3 min

Then on Feb. 12 to 15 a cyclone hit the North Island, which includes Auckland. When Cyclone Gabrielle hit, picking had just begun on pip-fruit farms, whose production is worth about NZ$1 billion a year. That would normally be a reason for a central bank to lift interest rates further, but some economists expect the RBNZ to look past the sudden rise as being temporary. Still, Kiwibank chief economist Jarrod Kerr said the central bank should pause hikes until the effect of the cyclone can be understood. After the Christchurch earthquake, the central bank cut its policy rate due to concerns about the economy.

The 2% inflation target is key to the Federal Reserve's vision for stable prices in the U.S. economy, according to the Federal Reserve Bank of St. Louis. But, "the 2% inflation target, it's relatively arbitrary," Josh Bivens, director of research at the Economic Policy Institute, told CNBC. "We led the way in inflation targeting," Arthur Grimes, professor of wellbeing and public policy at Victoria University, told CNBC. Canada announced its inflation target in 1991, and the United Kingdom followed suit in 1992. Then, Sweden and Finland declared inflation targets in 1993, according to the Organization for Economic Cooperation and Development.

Feb 20 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever. U.S. markets are closed on Monday for Presidents Day so Asian activity and volumes will be lighter than usual. This could give traders some rare breathing space to reflect on the scorching rise in U.S. market-based rates and yields. The People's Bank of China is scheduled to set its lending benchmark interest rates on Monday morning. chartThe Reserve Bank of New Zealand is expected to scale back its tightening on Wednesday, and raise rates by half a percentage point to 4.75%.

☆ Take Five: A year of war in Ukraine
▼ + stars: | 2023-02-17 | by ( ) www.reuters.com time to read: +5 min

LONDON, Feb 17 (Reuters) - The coming week will mark a year since Russia invaded Ukraine. The war goes on, but the world, and the markets, are in a very different place from last February. 1/A YEAR OF WARSenior politicians and military leaders from around the globe meet in Germany this weekend, days before the anniversary on Feb. 24 of Russia's invasion of Ukraine - Europe's biggest conflict since World War Two. Moscow is ramping up its spring offensive, while Ukraine - armed with heavier and longer-range firepower from the West - gathers strength for a counter push. On the same day as the Ukraine anniversary - Feb. 24 - Ueda should offer clues on timing when he testifies with his two would-be deputies to the lower house.

☆ RBNZ to hike rates 50bps on Feb. 22, another 50bps due by mid-year
▼ + stars: | 2023-02-16 | by ( Devayani Sathyan | ) www.reuters.com time to read: +4 min

The RBNZ has already raised rates by a total of 400 basis points since October 2021. The remaining five economists expected a second successive 75-basis point move at the Feb. 22 policy meeting. But nearly half of respondents, 45%, predicted a lower peak rate. Inflation was expected to fall to 5.1% this year and 2.6% in 2024, a Reuters poll showed last month. A recent RBNZ survey expected price pressures to slow to 3.30% in the next two years.

☆ Central banks hike rates again, but a pause is coming
▼ + stars: | 2023-02-02 | by ( ) www.reuters.com time to read: +5 min

REUTERS/Joshua RobertsLONDON, Feb 2 (Reuters) - Major central banks are steadily moving closer to a pause in their aggressive interest rate hiking campaigns. The European Central Bank and the Bank of England raised rates on Thursday, but markets suspect a peak is nearing. Overall, 10 big developed economies have raised rates by a combined 2,965 basis points in this cycle to date, with Japan the holdout dove. Canada's central bank has raised its policy rate at a record pace of 425 basis points in 10 months. The central bank raised its forecast for its peak interest rate to 5.5%, up from a previous forecast of 4.1%.

By announcing an inflation goal, central bankers feel they build credibility for themselves and focus the planning of households and firms in ways that help keep inflation controlled. Those decades, up to the end of the first year of the coronavirus pandemic in 2020, saw inflation largely contained. Achieving that target is just core to our overall monetary policy," Brainard said, a sentiment echoed in central bank headquarters from Frankfurt to London to Tokyo. "Let me be quite clear, there are no ifs or buts in our commitment to the 2% inflation target," Bank of England Governor Andrew Bailey said last year. Should inflation prove stickier than expected, achieving the central bank's 2% inflation goal could mean even more losses.

☆ The mouse that roared: New Zealand and the world's 2% inflation target
▼ + stars: | 2023-01-30 | by ( Lucy Craymer | ) www.reuters.com time to read: +5 min

Since it's arrival in 1990, the 2% inflation target phenomenon has sailed from Wellington around the globe to become the accepted norm among central banks, large and small, for grounding public expectations for what inflation ought to be. The adoption of the inflation target was followed by aggressive monetary tightening, with 90-day rates climbing to 15% in 1990. A year later, inflation had fallen to 2% and New Zealanders' inflation expectations adjusted quickly to the new paradigm. Initially there was debate about whether interest rates or money supply should be the target, but it was decided it was better to target the ultimate goal: inflation. "They did all the hard work and I just got all the glory and the title of being the most despised man in New Zealand," Douglas said.

☆ New Zealand's top PM contender wants to change central bank mandate, Ardern's policies
▼ + stars: | 2023-01-25 | by ( Lucy Craymer | ) www.reuters.com time to read: +3 min

WELLINGTON, Jan 25 (Reuters) - New Zealand's main opposition party leader and top prime ministerial contender, Christopher Luxon, wants to change the central bank's mandate and reverse some of former leader Jacinda Ardern's polices if he is elected. Luxon's conservative, centre-right National Party is leading over the governing centre-left Labour Party in opinion polls. There is a general election set for October and with inflation tracking near three-decade highs the cost of living is the key election issue. Luxon said if elected prime minister, he would change the mandate of New Zealand's central bank to focus solely on inflation, provide tax relief and widen immigration settings in an effort to dampen price inflation. Critics say the dual focus has contributed to inflation tracking at near three-decade highs, which has led to aggressive interest rate increases.

Her successor as Labour leader and prime minister faces a stern test in a general election in October, with support for the party falling and the country expected to fall into a recession next quarter. Despite her high global profile, Ardern's Labour Party has slid in the polls, hurt by rising living costs, growing crime and concern about social issues. That meant that even with traditional coalition partner the Green Party, polling at 9%, Labour could not hold a majority. Ardern most likely stepped down to give the Labour Party a chance to refresh and reposition itself ahead of an election in October, experts said. CONSERVATIVES BUOYEDThe conservative National Party may be buoyed by Ardern's resignation.

Reuters GraphicsOn a monthly basis, data showed that seven out of the 10 major central banks lifted rates in December. This compares to the monthly peak of 550 bps in September, though not all central banks meet on a monthly basis. "Most emerging market central banks are close to having completed their rate hike cycle," said Charles-Henry Moncheau, chief investment office at Syz Group. Central banks in Korea, South Africa, Thailand, Malaysia and Israel did not hold rate setting meetings in December. Emerging markets interest ratesReporting by Karin Strohecker and Vincent Flasseur in London, editing by Tomasz JanowskiOur Standards: The Thomson Reuters Trust Principles.

☆ Central banks ramp up rates again but the pace slows
▼ + stars: | 2022-12-15 | by ( ) www.reuters.com time to read: +5 min

LONDON, Dec 15 (Reuters) - Central banks in Britain, Norway, Switzerland, the euro zone and the United States have all raised interest rates this week. The central bank raised its forecast for its peak interest rate to 5.5%, up from a previous forecast of 4.1%. Money markets moved after the statement to forecast UK interest rates will top out at around 4.5% in August. Markets anticipate an 80% chance of a 50 bps hike when the Riksbank meets next in February. But market players do not expect any significant change from the world's lone major central bank dove.

☆ New Zealand economy grows strongly in Q3, but recession clouds ahead
▼ + stars: | 2022-12-14 | by ( Lucy Craymer | ) www.reuters.com time to read: +1 min

WELLINGTON, Dec 15 (Reuters) - New Zealand's economy grew strongly in the third quarter as its international borders fully reopened and travel spending rose sharply, while increased spending in the construction sector boosted building and engineering activity. Official data out on Thursday showed gross domestic product (GDP) rose 2.0% in the September quarter, more than double forecasts for a 0.9% gain and improving on the revised 1.9% rise seen in the second quarter. Annual growth jumped to 6.4%, as healthcare, travel and construction all saw significant growth, while gains were influenced down by the timing of various lockdowns in comparative periods. The strong growth looks set to fade, however, with expectations the central bank’s aggressive tightening cycle will push the economy into a recession next year. On Wednesday, the Treasury forecast the country would see three quarters of negative growth starting in the second quarter of next year, while the Reserve Bank of New Zealand is even more pessimistic, having forecast a year-long recession beginning in the second quarter of next year.

☆ 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.

Search resuls for: "Reserve Bank of New Zealand"

25 mentions found