Asia Summary and Highlights 27 May
RBNZ Keep Rates Unchanged with a 4-3 Vote
Australian Headline April CPI moderates to 4.2% from 4.6%
Asia Session
The RBNZ kept rates unchanged at 2.25% in the May meeting but on a hawkish 4-3 vote. Governor Breman broke the tie to keep rates at 2.25%. The OCR path is revised significantly higher from February forecast, around 2 hikes higher by year end 2026. They still see inflation returning to target range in mid 2027 but expecting above 4% in 2026. NZD/USD jumped and stay 0.68% higher at 0.5876.
Australian Headline April y/y CPI moderates to 4.2% from 4.6% but RBA preferred trim mean y/y CPI rose to 3.4% from 3.3%. It continues to point towards strong inflationary pressure but not enough to persuade the RBA to hike the 4th time in a row. Without strong support from the indecisive risk mood, AUD/USD is trading 0.14% lower at 0.7157. There hasn't been much progress in Middle East but optimism is driving oil lower. Else, EUR/USD is up 0.1%, GBP/USD and USD/JPY up 0.03% while USD/CAD unchanged for the session.
North American session
The USD saw some gains as the dip that followed signs of progress towards peace during a long weekend faded. USD gains were led by USD/JPY, extending above 159.30. EUR/USD erased its European gains but EUR/GBP advanced to .8650 from .8640 as GBP/USD slipped to 1.3450 from 1.3460. EUR/CHF marginally extended its European gains. AUD/USD and USD/CAD saw little movement.
May US consumer confidence slipped to 93.1 from 93.8 but with April revised up from 92.8 the data was slightly stronger than expected, holding up better than the record low Michigan CSI released on Friday.