Asian Open: RBNZ are expected to hike, but by how much?

How NZD pairs react today will likely be driven by whether RBNZ hike by 25 or 50 bps, and how hawkish that hike is deemed to be in their last meeting of the year.

Charts (1)



Asian Futures:

  • Australia's ASX 200 futures are up 1 points (0.01%), the cash market is currently estimated to open at 7,411.60
  • Japan's Nikkei 225 futures are down -110 points (-0.37%), the cash market is currently estimated to open at 29,664.11
  • Hong Kong's Hang Seng futures are down -11 points (-0.04%), the cash market is currently estimated to open at 24,640.58
  • China's A50 Index futures are down -18 points (-0.12%), the cash market is currently estimated to open at 15,631.60

UK and Europe:

  • UK's FTSE 100 index rose 11.23 points (0.15%) to close at 7,266.69
  • Europe's Euro STOXX 50 index fell -54.87 points (-1.26%) to close at 4,283.82
  • Germany's DAX index fell -178.69 points (-1.11%) to close at 15,937.00
  • France's CAC 40 index fell -60.38 points (-0.85%) to close at 7,044.62

Tuesday US Close:

  • The Dow Jones Industrial rose 194.55 points (0.55%) to close at 35,813.80
  • The S&P 500 index rose 7.76 points (0.17%) to close at 4,690.70
  • The Nasdaq 100 index fell -74.262 points (-0.45%) to close at 16,306.72


Oil prices get the Biden-bounce

The US delved into their oil reserves, a move that was floated by Biden in an attempt to cap oil prices. And as the release of 50 million barrels was less than expected (and already well telegraphed) oil prices actually rose around 3%. $80 is the next key level for bulls to conquer after printing a 3-day bullish reversal at a potential corrective low.

Euro lifted on improved business sentiment

Better-than expected business sentiment for the eurozone helped alleviate selling pressure on euro crosses. Manufacturing PMI rose to 55.8 from 54.2. EUR/JPY bounced for a second session after finding support at the August and September lows. EUR/NZD bounced from its YTD lows around 1.6065 whilst EUR/GBP and EUR/CHF made a similar move after refusing to probe Monday’s YTD lows. However, with the potential for lockdowns over Christmas then this could be a dead-cat bounce, so as of yet not ready to call a reversal for the unloved euro.

RBNZ are expected to raise rates today – but by how much remains the question

On aggregate, data from New Zealand has continued to warrant at least a 25 bps hike and there has been much speculation that it could be as much as 50 bps. Unemployment is at a record low, inflation is at 4.9% and inflation forecasts were revised higher to 2.9% for the +1 year and 3.7% for the +2 year. Perhaps there is a case for the OCR at 1%, although what makes us wary is that RBNZ already offer the highest rates among FX majors and that they had reminded markets that central banks tend to cut aggressively and hike slowly (even going as far to say hikes are usually 25 bps). Whilst OIS (overnight index swaps) have fully priced in a 25 bps hike, we need to look 6 month south before OIS fully prices in a 50 bps hike. So, 25 bps looks more likely today but that is no reason to not prepare for a 50.


AUD/NZD probed the December 2020 lows and tested trend resistance overnight. And we see the potential to break higher should RBNZ only hike by 25 bps. There has been much speculation over the last several weeks of today’s hike so it is already old news, and a ‘mere’ 25 bps hike could shake out some bullish NZD positions in the process. We would either require a 50 bps hike or a ‘hawkish; 25 bps hike today to see AUD/NZD retest 1.0300.

Technically, a higher low formed above 1.0300 and its decline from the 1.0615 high appears to be corrective in nature due to the overlapping of the swings. Still, at current levels it remains favourable to bearish swing traders, should today’s meeting deliver the hawkish goods. Whilst a break above 1.0450 could be taken as a sign of its bullish reversal.

The ASX rallied with iron ore prices yesterday

The ASX 200 made ‘short’ work of our bearish bias yesterday, rallying from the open despite the weak lead from Wall Street and negative sentiment across other parts of APAC. Mining companies were top of the pack as iron ore prices ripped higher, as traders speculated the resumption of steel production in China. Therefore, iron ore is clearly a market to watch today for sentient of the ASX. Take note of the resistance zone around 7431 – 7442 as we likely need a break above it for any rally to be sustained.


ASX 200: 7410.6 (0.78%), 23 November 2021

  • Energy (2.54%) was the strongest sector and Information Technology (-3.49%) was the weakest
  • 8 out of the 11 sectors closed higher
  • 3 out of the 11 sectors closed lower
  • 6 out of the 11 sectors outperformed the index
  • 112 (56.00%) stocks advanced, 82 (41.00%) stocks declined
  • 64% of stocks closed above their 200-day average
  • 60.5% of stocks closed above their 50-day average
  • 49.5% of stocks closed above their 20-day average


  • + 9.81%-Fortescue Metals Group Ltd(FMG.AX)
  • + 8.04%-Champion Iron Ltd(CIA.AX)
  • + 5%-Mirvac Group(MGR.AX)


  • -9.58%-Bapcor Ltd(BAP.AX)
  • -5.63%-WiseTech Global Ltd(WTC.AX)
  • -5.6%-Silver Lake Resources Ltd(SLR.AX)


Up Next (Times in AEDT)




How to trade with

Follow these easy steps to start trading with today:

  1. Open a account, or log in if you’re already a customer.
  2. Search for the pair you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels.
  4. Place the trade.

Disclaimer: The information on this web site 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. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account