CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

ASX200 range holds after stronger AU jobs offset by softer China GDP

July 15, 2021 1:52 AM
The early termination of the LSAP or QE comes as the biggest surprise. The purpose of the LSAP was to lower long-term interest rates as well as the exchange rate and to underpin economic growth and inflation. The program was scheduled to run until June 2022. 

“The Committee agreed that further asset purchases under the LSAP program were no longer necessary for monetary policy purposes and directed staff to halt purchases by 23 July 2021. 

The bank's assessment of economic activity was upgraded and in the final paragraph of the press release, the following forward guidance was noted: “the Committee agreed that the level of monetary stimulus could now be reduced to minimise the risk of not meeting its mandate.”

As outlined in yesterday's preview, the expectation heading into today's meeting was that the RBNZ would endorse market pricing of a first interest rate hike by November 2021. However, it is now clear that meetings in mid-August and early October are also live. Even more so if Q2 inflation data on Friday is higher than expected. 

Following the announcement, NZDUSD rallied from .6965 to a high near .7020, building on the signs of a base noted yesterday near .6920. AUDNZD has fallen from 1.0700 to a low of 1.0626, leaving it vulnerable to a deeper decline pending the outcome of tomorrow's Australian labour market data for June. 

The market is looking for employment to rise by 25k and the unemployment rate to fall to 5.0%. The labour market remains the main focus of the RBA as it looks for evidence that the faster than expected improvement in the labour market is feeding through into higher wages. 

Providing there is no outsized gain in employment like the one seen last month, the expectation is for AUDNZD to continue lower towards the year-to-date low at 1.0540, with risks below here towards 1.0418.

Source Tradingview. The figures stated areas of the 14th of July 2021. Past performance is not a reliable indicator of future performance.  This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024