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Reserve Bank of New Zealand leaves rates unchanged

Published: Thursday 10 May 2018

  • Bank of England rate decision in focus
  • US unemployment report awaited
​​By Zafer Deniz
The Reserve Bank of New Zealand (RBNZ) left the official cash rate at 1.75 percent overnight. Economic growth and employment in New Zealand remain robust, near their sustainable levels. However, consumer price inflation remains below the two percent target, in part down to recent low food and import price inflation, and also subdued wage pressures. The New Zealand Dollar fell slightly on the news as the RBNZ has made it clear that it has no plans to increase rates in the near future. 
Japan continues monetary stimulus 

The Bank of Japan’s last monetary policy meeting minutes were also released. This highlighted the need to continue with powerful monetary easing if the elusive inflation target is to be hit. One member of the policy board wanted to discuss an exit from easing, but with inflation still so far from the target, this is likely to remain a minority view.

Key US data released this later this afternoon

We also get US consumer price index and unemployment claims data in the afternoon, which is forecast to be a tad higher at 219k.
Today’s the day for the Pound

It’s a big day today for the Pound as markets look forward to “Super Thursday”.
Market commentators and analysts do not expect an interest rate rise at this time. The Pound could improve on a surprise increase. 

We could potentially see Sterling strengthen, if, against market expectations, policymakers increase interest rates. If more than two of the Monetary Policy Committee (MPC) vote for an increase, this could also boost the Pound.     

If committee members are in agreement that there should be no rate increase, this could send Sterling spiralling downwards.

There is a host of UK data also expected this morning, but the focus will be firmly on the Monetary Policy Committee at midday, with Bank of England (BoE) Governor Mark Carney speaking 30 minutes later. 

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Today's Major Economic Releases

Market BST Data/Event Previous Expected
GBP 09:30 UK: Manufacturing Production -0.2% -0.2%
GBP 09:30 UK: Goods Trade Balance -10.2b -11.2b
GBP 12:00 Bank of England Official Bank Rate 0.50% 0.50%
GBP 12:00 Bank of England Official Bank Rate Votes 2-0-7 2-0-7
GBP 12:00 Bank of England Inflation Report    
GBP 12:00 Bank of England Policy Summary    
GBP 12:00 Bank of England Asset Purchase Facility 435b 435b
GBP 12:00 Bank of England Asset Purchase Facility Votes 0-0-9 0-0-9
USD 13:30 US: Consumer Price Index -0.1% 0.3%
USD 13:30 US: Core Consumer Price Index 0.2% 0.2%
USD 13:30 US: Unemployment Claims 211k 219k

For more information, infographics and the latest currency insights, visit www.halofinancial.com/news