Tag: inflation

New Zealand June quarter CPI expected to disappoint

New Zealand June quarter CPI expected to disappoint

Trading Articles
The consumer price index data for the period ending June for New Zealand is expected to released this week. The economists polled are forecasting a 0.2% increase on a quarterly basis. This would signal a sharp slowdown in inflation from the 1% gain in prices registered in the March quarter. The gains in March were led by a spike in food and fuel prices. The RBNZ's forecast for inflation stands at 0.3% for the June quarter, slightly above the consensus estimates. It is no secret that New Zealand's consumer price index is often influenced by temporary factors. On a year over year basis, New Zealand's consumer prices are expected to rise 1.9%, slowing from 2.2% year over year increased in March 2017. Weaker CPI expected due to lower food prices Food prices, which played an importan...
What is happening to the bond markets after a Trump victory?

What is happening to the bond markets after a Trump victory?

Financial Markets Explained
The bond markets were in the news for the two straight weeks since the U.S elections held on November 8th 2016. After an initial rally, bond markets fell sharply and continued to fall in the following days making it one of the most talked about asset in the financial media. It wasn't just U.S bonds but also across the world, including Japan and Europe. For example, yields on the 10-year government bonds in Japan rose to 0.035% on Friday, November 18th, 2016, up from 0.005% just the day before. It was the first time that yields rose. Even far flung economies such as Singapore, Malaysia, Thailand, bond yields spiked. In bonds, yields run inversely to prices; meaning that when bond prices fall, yields rise. Learn the basics of bonds here. Blame Trump's policies for rise in bond
Why did the Euro rally on ECB’s decision in December, 2015

Why did the Euro rally on ECB’s decision in December, 2015

Financial Markets Explained
On December 3rd 2015, the European Central Bank met for its monetary policy review. The ECB decided to leave the minimum bid rate unchanged at 0.05%, but cut the deposit rate to -0.30%, from -0.10% a 20bps cut for deposits held at the Central Bank. The ECB then followed up the monetary policy decision with a press conference, where the Central Bank announced that it would extend the QE deadline from September 2016 to March 2017, while leaving the current pace of QE purchases unchanged at €60 billion per month. During the press conference and into the end of the day, the Euro rallied close to 3.06% for the day, closing at 1.0938 and posting a 21-day high. Prices reversed sharply after initially opening the day (03/12/2015) at 1.0612. So why did the Euro rally so strongly despite the E
EURZND – Silently slipping away

EURZND – Silently slipping away

Technical Analysis
As the Euro kept creeping up higher against the greenback and the bullish trend of the British Sterling supported by what seems to be a text economic recovery, most trading circles obviously kept their focus on the majors such as the EURUSD, GBPUSD and not to forget some of the Yen crosses. While the British Pound might have found favour with the traders and thus becoming a currency to trade, the EURNZD has been virtually ignored despite some major market moving fundamental developments. Unless you've been living under a rock, the RBNZ in March hiked the interest rates by 25bps to 2.75% making it the first in the group of developed economies to hike interest rates. In a world of currency wars and record low interest rates, the RBNZ rate hike is something that definitely deserves a secon...
Why should you be paying attention to Central Banks

Why should you be paying attention to Central Banks

Financial Markets Explained
The Forex markets have seen a new entrant, the likes of the Central Bank now getting directly involved in their respective currencies. Being the largest institutional liquidity provider, the role of the Central Banks has become increasingly influential in the forex markets. If interest rate decisions was the primary tool, we are now in the age of direct market intervention in the likes of quantitative easing or asset purchase program. It is no wonder then that monitoring the policies of these large institutions, from a trader's perspective is imperative. Commonly referred to as currency wars, a case in point can be derived from the US Federal Reserve Bank, which (along with other Central Banks) started injecting money into the financial markets (QE). If earlier the Central bank minutes ...