Reserve Bank Of New Zealand And Bank Of Canada Decide On Rates

The Reserve Bank of New Zealand, Bank of Canada and the European Central Bank interest rate meetings draw investors and traders' attention this week.

As global markets digest the strong US Nonfarm Payrolls (NFP) data released on Friday, economists will be seeking pieces of information to be able to forecast the future of monetary policies in this group of countries.

RBNZ Interest Rate Decision

Early on Wednesday morning, the Reserve Bank of New Zealand is expected to announce its interest rate decision. Economists do not expect any change in monetary policy after the end of the RBNZ’s board meeting. A Bloomberg news survey showed that all 15 analysts surveyed forecast the RBNZ would keep the Official Cash Rate (OCR) on hold for the sixth time in a row.

New Zealand’s economy was in a technical recession in the second half of 2023. Some analysts suggest that more signs of a weak economic recovery could force the RBNZ to take action.

Some days ago, the RBNZ’s governor Adrian Orr said that the central bank is on track to returning inflation to targeted levels. “We're now in a much happier space, where most central banks feel we're back on top of inflation, not there yet. But inflation expectations have been the big concern, the more people think inflation will rise next year, the more inflation will rise next year," he noted. Orr also reiterated that the RBNZ is “laser-focused on its job to control inflation.”

Bank of Canada Interest Rate Decision

The Canadian central bank board will convene to decide on monetary policy on Wednesday. As with RBNZ, market analysts forecast that borrowing costs will be kept on hold after the meeting. Economists at the Royal Bank of Canada suggested that the BoC could try to keep its options open as “they’ve been pretty non-committal about when the first interest rate cuts might come.”

Bank of Canada (BoC) Senior Deputy Governor Carolyn Rogers said ten days ago that “inflation has come a long way down; we need to finish the job. In the future, inflation may be more of a threat than it has been over the past few decades.” Rogers also mentioned that Canadian productivity is low and that it hasn’t risen in the post-pandemic era, adding that monitored investment levels are low, following the pattern of the pre-pandemic years.

Fed’s Kashkari: US Inflation Must Get To 2%

In his remarks delivered in the University of Montana, Federal Reserve Bank of Minneapolis President Neel Kashkari said that can’t stop short on the inflation fight as price levels are still hovering around 3%. Kashkari mentioned that the labour market in the US is still “hot” but not in the way it was a year ago.

Commenting on cryptocurrencies, Kashkari noted that crypto can’t be used as inflation hedge or storage of value as they are too volatile.

Test Your Trading Strategies on an Admirals Risk-Free Demo Account 

Are you interested in practising trading without risking your funds? A demo trading account from Admirals allows you to do just that, whilst trading in realistic market conditions. Click the banner below to open a demo account today:

This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.