ForexLive Asia-Pacific FX news wrap: RBNZ’s 3rd consecutive 50bp rate cut, NZD higher

• S&P ratings revise Australian state Queensland rating outlook to negative
• Would-be Kishida assassin gets 10 years in jail
• Federal Reserve Vice Chair Philip Jefferson is speaking after market close on Wednesday
• Goldman Sachs says OPEC+ will delay its gradual production increases from April to July
• ANZ forecast 3 25bp rate cuts from the Reserve Bank of New Zealand, in April May and July
• More on Trump’s proposed 25% tariff on automobiles, pharmaceuticals & semiconductor chips
• RBNZ Governor Orr says NZD around fair value
• J.P. Morgan upgrades Singapore equities to overweight on strong outlook, target 6% gain
• More from RBNZ Governor Orr, says 3.75% is the high end of the range of neutral rates
• RBNZ Governor Orr confirms a rate cut in April and then May sounds about right
• China’s new home prices remain stagnant in January amid property market struggles
• BOJ’s Takata says must hike rate more if economy moves in line with BOJ forecasts
• Reserve Bank of New Zealand rate cut news conference begins 0200 GMT/2100 US Eastern time
• New Bank of Japan board Junko Koeda approved by Japan’s parliament
• NZD/USD lower after the as expected 50bp rate cut from the Reserve Bank of New Zealand
• PBOC sets USD/ CNY reference rate for today at 7.1705 (vs. estimate at 7.2807)
• RBNZ cuts cash rate by 50bp vs. 50bp expected
• Mitsubishi UFJ Morgan Stanley shifted its BOJ rate hike call to July, from Q4 previously
• Bank of Japan Board Member Takata Hajime is speaking soon
• Australian data – Wage Price Index (Q4 2024 ) +0.7% q/q (expected +0.8%)
• Japan data – January exports and imports improve y/y, December machine orders improve y/y
• Reserve Bank of New Zealand expected to cut official cash rate (OCR) target by 50bp today,
• Japan manufacturing sentiment improves second consecutive month, services sector stable
• Bank of America Survey: Trade war fears rise as US equities remain overvalued
• JP Morgan on Trump’s social media activity showing diminished market-moving influence
• Trump said he may not let Venezuela export oil, petroleum products, via firms like Chevron
• Bitcoin’s Path to $500K: Institutional interest grows amid (trimmed) regulatory hopes
• New Zealand Q4 PPI falls q/q
• Trump says “will be announcing” large firms that are coming back to the US re Chips, cars
• Trade ideas thread – Wednesday, 19 February, insightful charts, technical analysis, ideas
• Forexlive Americas FX news wrap: US dollar firms and US stocks close at a record

In
late afternoon news from the US, Trump signalled he could slap a 25%
tariff on imported automobiles, especially targeting those from
Europe and Asia (China, Japan and South Korea are notable large
exporters of vehicles). A similar tariff could also hit
pharmaceuticals and semiconductor chips. Trump indicated these could
apply as soon as April 2.

Nothing
is solid on this as yet, but it does raise further trade war
implication concerns.

Trump
also said he may not let Venezuela export oil and petroleum products
via firms like Chevron.

The
main focus for the session was the Reserve Bank of New Zealand. The
Bank cut its cash rate target by 50bp, the third 50bp rate cut in a
row. Guidance was dovish, the OCR path indicating a further cut by
50bps by mid-this year. This is expected to be two 25bp cuts although
ANZ in New Zealand are expecting three 25bp cuts, one each in April,
May and July (the next three meetings, the 9th,
28th
and 9th
respectively).

The
New Zealand dollar chopped up and then down after the announcement,
settling around lows circa 0.5680 for a half hour or so before
surging back to record a new high for the session above 0.5720. There
is more on the RBNZ in the points above.

AUD/USD
followed the NZD higher.

From
Japan we had comments from Bank of Japan policy board member Takata.
He
said (in brief) that Japan’s real interest rates remain deeply
negative and are still accommodative, but:

• the
  Bank must adjust degree of monetary support further if economy moves
  in line with its forecasts,
• the
  Bank must gradually shift policy to avoid upside price risks from
  materialising.

USD/JPY
is not really net changed much at all on the day, but it did pop
briefly to just over 152.30 before coming back to lows circa
151.80.

From
China we had January home price data. New home prices recorded their
20th straight m/m % drop. 2nd hand home prices hit 21 straight falls.

Silver
fell circa 1%.

This article was written by Eamonn Sheridan at www.forexlive.com.