TLDR: Softer-than-forecast US inflation data out overnight suggested the world’s biggest economy may not need to hike interest rates quite so much. That’s good news in the global inflation fight and the prospects for lower interest rates makes assets more valuable.
Investors initially celebrated by pushing up global shares 1.5%, but cooled their jets in the last couple of hours as they await the US Federal Reserve’s big rate hike decision tomorrow morning (NZ Time). The New Zealand dollar jumped almost a cent to a seven-month high of 65 USc this morning because slower US rate hikes make the NZ dollar relatively more attractive.
FYI, I’ll be publishing again later today after the Treasury releases the Half Yearly Economic and Fiscal Update (HYEFU) and Finance Minister Grant Robertson releases his Budget Policy Statement (BPS) after a couple of hours in ‘lock-up’. Also later today, Te Pūtea Matua (Reserve Bank) Governor Adrian Orr is scheduled to make his final appearance for the year before the Finance and Expenditure Select Committee, which I’ll cover. I’ll give brief initial updates for paying subscribers over on Substack Chat, which is also now available on Android. They can also see and hear much more below the paywall fold and in the podcast above.
Elsewhere in our political economy here and overseas this morning:
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