RBNZ Holds Rates, Signals Openness to Further Cuts

AUD

The Aussie Dollar opens flat against the majors despite China’s producer prices falling -3.6% year-on-year in June, the biggest drop in nearly two years as deflation deepens. Consumer prices rose +0.1% on a yearly basis, a little higher than expected. Asian equities ended the day mixed, with the Nikkei trading +0.3%, the Hang Seng -1.1% and the Shenzhen -0.1%. Locally the ASX finished the day down by -0.6%, with real estate and materials leading losses. Commodities followed suit, closing mixed with Gold +0.1%, Silver -0.2%, Iron Ore +0.4%, and Copper being the biggest loser -2.5%. It will be a quiet end to the week for local data releases, however, we may be getting some New Loans data out of China which is set as tentative.
 

USD

The AUDUSD holds its recent gains, opening flat at 0.6534 after the FOMC Meeting Minutes revealed most Fed officials see rate cuts coming, however, there was a divide on how many cuts there would be, and policymakers largely held to a wait-and-see position on future rate moves. Wall Street closed in the green with the Dow Jones +0.5%, S&P 500 +0.6% and the NASDAQ +0.9%. Looking ahead at US data releases, there will be Unemployment Claims later this evening at 10:30pm with weekly claims expected to increase to 236K from the previous of 233K. FOMC Members Waller and Daly will also be speaking early tomorrow morning.
 

EUR

AUDEUR opens flat at 0.5574 with little data released over the past 24h. Overnight, German Buba President Nagel stated that the ECB should neither plan nor rule out further cuts during his speech at the University of Tübingen. Eurozone equities saw a boost closing in the green with both the DAX and CAC +1.4%. Looking ahead at Eurozone news later this afternoon we will be getting German Final CPI m/m at 4pm, followed by Italian Industrial Production m/m at 6pm to end the day.  
 

GBP

Minimal data sees AUDGBP open flat at 0.4809, trading a 0.4% range over the past 24h. The FTSE closed +0.1%. This afternoon, UK GDP is expected at +0.1% month-on-month. Recently, the Bank of England indicated 'The outlook for UK growth over the coming year is a little weaker and more uncertain'. 
 

NZD

AUDNZD remains at 6.5-week highs of 1.0894. Yesterday, the Reserve Bank of New Zealand held the Official Cash Rate at 3.25%, as expected. Notably, the central bank said it expected to loosen monetary policy if medium-term inflation pressures continue to ease as forecasted. The RBNZ has cut rates by 225bps since August 2024, but with inflation at 2.5% and concerns that trade tensions could add to price pressures, the central bank has adopted a more cautious approach.