RBNZ rate decision
The Reserve Bank of New Zealand will convene this week’s Wednesday to make decisions regarding interest rate policy. The RBNZ increased rates by 50 basis points to 3.5% at the last meeting on October 5. The minutes of the meeting revealed among other things, that a 75bps rate hike was considered. However, the Committee ultimately opted to just increase rates by 50 basis points. New Zealand issued its Q3 CPI data a week following the most recent RBNZ meeting.
In contrast to the 6.6% consensus estimate and the 7.3% Q2 reading, the headline print was 7.2%. The actual print was essentially unchanged from the prior quarter, despite substantially lower expectations for the Q3 print. Also rising from 8.3% YoY to 10.1% YoY in October was the price of food. The Committee will probably use this as justification to increase the official cash rate by 75 basis points at their future meeting, bringing it to 4.25%.
The FOMC Minutes, which will provide further information about the meeting conducted on November 2 and during which the Fed voted to raise interest rates by 0.75 percentage points for the fourth consecutive time, may reveal policymakers’ willingness to implement smaller rate increases in the future.
Eurozone and UK PMIs
On Wednesday, all eyes will be on the most recent PMI business surveys in the Eurozone and the United Kingdom. These indicators are expected to continue to drop, which would support worries that both economies are either already in a recession or are on the verge of entering one.