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The NZD/USD had a range of 0.5739 - 0.5802 in the Asia-Pac session, going into the London open trading around 0.5745, -0.95%. A dovish surprise 50bps cut by the RBNZ has given the NZD/USD the momentum to extend below 0.5800 and is currently pressing the 0.5750 area. The market has already had a decent move on the day but rallies should now be faded. Should NZD/USD sustain the break through this support the focus will turn toward the multiple bottoms toward the 0.5500 area.

• MNI - RBNZ: Larger Cut Gives Sluggish Economic Recovery Extra Boost, Easing Bias. The MPC discussed cutting the OCR by 25bp or 50bp and all members agreed the latter was appropriate given material spare capacity in the economy. Given that this is likely to persist for some time and that while the economy has begun to recover it remains lacklustre, further cuts bringing policy into stimulatory territory are likely. In line with this it said that “the Committee remains open to further reductions in the OCR”
• RBNZ dated OIS pricing closed 9-15bps softer across meetings. 34bps of easing had been priced for this meeting. A cumulative 62bps of easing had been priced by November 2025 versus 75bps now (including today's move).
• "ANZ BANK NOW SEES RBNZ CUTTING CASH RATE TO 2.25% IN NOVEMBER" - BBG
• Options : Closest significant option expiries for NY cut, based on DTCC data: 0.5820(NZD305m). Upcoming Close Strikes : none - BBG
• AUD/NZD range for the session has been 1.1342 - 1.1446, currently trading around 1.1425. The Cross has surged back above 1.1400 on the surprise 50bps cut. I continue to feel the cross should do some work towards the 1.1500 area. A clear sustained break above 1.15/1.16 resistance and the market will begin to think about levels back towards 1.2000 and above.

Fig 1: NZD/USD Spot Weekly Chart

Source: MNI - Market News/Bloomberg Finance L.P

The University of the Thai Chamber of Commerce consumer confidence measure for September was little changed rising slightly to 50.7 from 50.1 with the economic assessment at 44.4 after 44.1. The quarterly averages have been moderating for over a year and Q3 suggests that consumption growth slowed further after moderating 0.4pp to 2.1% y/y in Q2. The slowing growth outlook while inflation holds below the bottom of the Bank of Thailand’s 1-3% target band should drive another 25bp rate cut to 1.25% today (see MNI BoT Preview). This is the first meeting for new Governor Vitai who wants to support growth.

Thailand private consumption

• Consumer confidence has been impacted by recent political instability with it falling in August to its lowest level since December 2022. Weak income growth and a drop in tourist arrivals have also weighed on spending.

Thailand tourist arrivals

• Fiscal support worth $1.36bn was approved this week to subsidise household essentials and is to be distributed between 29 October and 31 December and may boost confidence in coming months. Around 20mn Thais will qualify for the THB 2000 payment and the government expects the plan to boost growth by 0.3-0.4pp. Elections are due before April and this looks like a sweetener for voters.
• The slight pickup in consumer confidence was driven by a 1.5 point improvement in the outlook to 58.7 while the assessment of present conditions remained depressed falling 1 point to 34.4.
• Even though labour market conditions only rose 0.2 to 48.5, there was an improvement in future income sentiment to 59.3 from 58.0.

The USD/JPY range has been 151.74 - 152.65 in the Asia-Pac session, it is currently trading around 152.35, +0.30%. The pair has extended its move higher in Asia and is attempting to break above the pivotal 152.00 area, if this break is confirmed it will turn the focus back to the 155-160 area. The last CFTC data available showed Asset Managers remained notably long JPY, should these moves begin to gather momentum, they could be forced to first pare back their longs and then if these significant levels are broken begin to rebuild JPY shorts. Many crosses are breaking through some pivotal areas(CNH/JPY Above 21.00) as well and unless the government says something to contradict the markets thinking these could begin to gather momentum. Expect dips to now find support unless there is push back on the market's views of Takaichi’s policies.

• MNI - Aug Labor Earnings Notably Sub Forecasts, BoJ Likely Holding In Oct: August labour earnings data in Japan was comfortably below market expectations. Headline earnings rose 1.5%y/y (against a 2.7 forecast and 3.4% July outcome), while real earnings dipped back to -1.4%y/y (-0.5%) was forecast. Real earnings have not been in positive territory (in y/y terms) so far in 2025. This will reinforce expectations of the BoJ likely remaining on hold at the Oct policy meeting.
• “JAPAN RULING BLOC TO DELAY DIET SESSION TO OCT. 20 OR LATER:FNN" - BBG
• Options : Close significant option expiries for NY cut, based on DTCC data: 147.00($1.47b). Upcoming Close Strikes : 150.00($778m Oct 9), 150.15($1.08b Oct 9) - BBG.

Fig 1 : USD/JPY Spot Weekly Chart

Source: MNI - Market News/Bloomberg Finance L.P