New Zealand's reserve bank set to maintain status quo on interest rates
Investing.com - Ahead in the session, New Zealand's central bank is slated to announce its stance on monetary policy with predictions hinting towards a pause at 5.5%.
Governor Adrian Orr had previously indicated a comfort level within the committee regarding an unwavering path that would keep interest rates around 5.5%, during their meeting in May when they augmented interest rates by 25 basis points but also signaled a possible end to this tightening cycle. Market reactions so far reflect an acceptance of this guidance from RBNZ, anticipating no change in the decision while another rise in the interest rate before year-end remains probable.
The Kiwi economy teeters on technical recession following two consecutive quarters of GDP shrinkage, while inflation has decelerated during Q1 yet remains high. The Consumer Price Index revealed a dip in annual rate for Q1 from 7.2% down to 6.7% with the next inflation report due out on July 18th.
RBNZ faces an uphill battle juggling high albeit lowering inflation and economic recession – should inflation halt its downward trajectory, markets may contemplate additional rate hikes once again.
July’s gathering will serve as an interlude between Monetary Policy Statements scheduled for May and August where RBNZ will adjust its economic projections; hence deviating from previous statements appears unlikely given the absence of fresh forecasts at Wednesday’s meeting which serves more like an interim check-in where officials evaluate current data and future financial outlooks.
The NZD/USD was trading at 0.6195.
Zelenskiy's quest for NATO timeline
As NATO leaders congregated in Vilnius this Wednesday, Ukrainian President Volodymyr Zelenskiy was also present to voice his concerns about Ukraine's future within the alliance. However, he didn't receive any commitment on when his country might gain full-fledged membership.
The second day of the summit marked the beginning of the NATO-Ukraine Council sessions - a forum designed to foster stronger ties between Kyiv and the 31-member military coalition spanning both sides of the Atlantic.
In addition to participating in these discussions, Zelenskiy is set to have a one-on-one meeting with U.S. President Joe Biden. His agenda? To secure additional arms support from America as well as other nations within NATO for combating Russia's aggression that began last February.
Promises of long-term security assistance are anticipated from key players like the United States, Britain, France, and Germany in forms such as high-tech weaponry training and potential military aid post-summit; others are expected to follow suit with their respective commitments.
Addressing thousands at Vilnius on Tuesday night amidst heavy security presence overhead, Zelenskiy expressed frustration over NATO not providing clarity regarding Ukraine’s prospective membership – something he previously labeled “ridiculous”. He maintained his conviction stating that "NATO would enhance safety measures in Ukraine while Ukraine would bolster NATO".
However, by late Tuesday evening, he adopted a more conciliatory tone appreciating allies’ readiness for new initiatives tweeting “More weapons for our warriors...more protection for entire Ukraine! We will introduce significant defense mechanisms into our arsenal."
Despite repeated assertions from Kyiv officials seeking immediate inclusion into the organization which has been pending since the 2008 declaration by Nato promising eventual membership; it came with clear stipulations indicating no automatic acceptance even after cessation of hostilities against Russia.
Optimism over US-China relations fuels Chinese stocks rally
The Chinese stock market experienced a favorable uptick buoyed by the anticipation of more stable ties between China and the US, following a recent visit from Treasury Secretary Janet Yellen. Additionally, Beijing's most recent supportive gestures towards its property sector played a significant role in boosting the market.
Chinese real estate developers witnessed modest gains after authorities unveiled novel loan-relief measures aimed at companies struggling in this area. However, there is widespread skepticism among analysts who argue that these policies may not be sufficient to rejuvenate this beleaguered industry. Poly Developments & Holdings Group saw an increase of 0.3%.
Shanghai Composite rose by 0.6% to reach 3221.4 points.