PREVIOUS TRADING DAY EVENTS 23 May 2023

Announcements  

As expected, New Zealands central bank RBNZ increased the Official Cash Rate to 5.50, from 5.25. It also signalled that tightening is probably over, keeping the OCR to a restrictive level to ensure that consumer price inflation returns to the 1 to 3 annual target range; the intention is to achieve maximum sustainable employment.

RBNZ Governor Adrian Orr said at a media conference that there were signs higher interest rates were already having the desired effect. 

It is quite nice to see some of the things we were hoping would already be here actually be here. And that is the lower surprise on GDP, the decline in inflation and all the indicators that suggest the interestsensitive parts of the New Zealand economy are yielding, he said.

New Zealands annual inflation is currently running just below a threedecade high of 6.7, with expectations it will return to the central banks 1 to 3 target within two years.

At the time of the release, the NZD depreciated greatly causing the NZDUSD to drop more than 70 pips at that time, with the effect continuing during the trading day still. 

Source httpswww.reuters.commarketsratesbondsrbnzraisescashrateby25bps5520230524

Finally, we see some progress in regard to the U.K.s inflation data. The figures released today at 900 showed that annual inflation dropped to 8.7. Specifically, the Consumer Prices Index CPI rose by 8.7 in the 12 months to April 2023, down from 10.1 in…