NZD: Asia Wrap - NZD/USD Bounces As Risk Moves Higher Into US Inflation Data

Gold prices are 0.6% lower at $3378.7/oz during today’s APAC session. They fell to a low of $3367.79 before stabilising. The yellow metal has sold off as markets wait for clarification on the tariff-status of US gold imports. Stronger risk appetite with equities rallying is also pressuring bullion. In addition, President Trump and Putin are scheduled to meet on Friday in Alaska to discuss a peace deal for Ukraine potentially reducing geopolitical risks.  

• Gold was exempted from US tariffs in April but last week officials stated that 100oz and 1kg bars would face import duties introducing increased uncertainty into the market and risking the seamless operation of trade, according to Bloomberg.
• The disappointing July US jobs data returned bullion close to the top of its recent range and corrections are still seen as corrective. Today’s trough remained above initial support at $3268.2, 30 July low. Initial resistance is at $3409.2, 8 August high.
• Silver is down at -0.7% to $38.08 off the intraday low at $37.924. The trend remains bullish though and the metal is trading above initial support at $36.216, 31 July low. Initial resistance is at $39.655.
• The US dollar is weaker (BBDXY -0.2%). Equities are rallying with the S&P e-mini up 0.2%, Hang Seng +0.2% and TAIEX +0.5% but KOSPI flat. Oil prices continue trending lower with WTI -0.7% to $63.43/bbl. Copper is flat.
• There are few events coming up on Monday. Italian July CPI and June trade are released later. US CPI on Tuesday will be the main focus of the week but Friday’s July retail sales and preliminary August Uni of Michigan consumer sentiment will also be monitored.

At the time of writing, RBA-dated OIS pricing is little changed on the day across meetings ahead of tomorrow’s RBA Policy Decision. 

• A 25bp rate cut this week is given a 97% probability, with a cumulative 62bps of easing priced by year-end (based on an effective cash rate of 3.84%).
• Notably, pricing remains 7-16bps firmer than levels before the July 8 RBA Meeting.

Figure 1: RBA-Dated OIS – Current Vs. Pre-RBA (July)

Source: Bloomberg Finance LP / MNI 

NZGBs closed little changed, with benchmark yields flat t 1bp higher, after a subdued start to the trading week. 

• Cash US tsys were closed during today’s Asia-Pac session, with Japan out for a holiday.
• Swap rates closed unchanged.
• With the next RBNZ meeting approaching (August 20), this week contains a number of high frequency releases that the MPC monitors and should give a sense for how the economy began Q3.
• July card spending is out Wednesday and while it is off its lows, growth has remained soft. There could be some payback in the month following the 0.5% m/m rise in June.
• On Friday, July monthly price series are released including food, travel, electricity and rents. Food and power price inflation have been trending higher while petrol and rents have been moderating.
• The July BNZ manufacturing PMI also prints on Friday. It returned to contractionary territory in May after five months signalling growth in the sector. In June, the pace of decline moderated with the index at 48.8 after 47.4.
• RBNZ dated OIS pricing closed unchanged across meetings. 23bps of easing is priced for August, with a cumulative 41bps by November 2025.
• On Thursday, the NZ Treasury plans to sell NZ$200mn of the 3.00% Apr-29 bond and NZ$250mn of the 2.75% Apr-37 bond.