Rate Rumble: RBNZ, BoC, and ECB Take Centre Stage

Wednesday, 10th April 2024, 04:00 – RBNZ Interest Rate Decision

The New Zealand central bank maintain its benchmark interest rate at 5.50% as expected during its previous meeting. While there was no surprise of the central bank paused rates, the less hawkish tone was a surprise as 23% of the market surveyed by Reuters predicted an interest rate hike. RBNZ Governor Orr has been resisting expectations for rate cuts and has affirmed that the possibility of rate hikes remains under consideration. However, during the previous meeting, Orr stated that there was a unanimous agreement that the current official cash rate is adequate. With that, the central bank is widely expected to maintain the current rate in the foreseeable future.

Wednesday, 10th April 2024, 14:30 – US CPI (YoY) (Mar)

In February, the rate of consumer price growth in the United States picked up pace with the reading came in at 3.2%, surpassing expectations of 3.1% for underlying inflation. The data suggests persistent inflationary pressures that have complicated the timing of any potential interest rate cuts by the Federal Reserve this year. With the sticky inflation persist, the path to Fed’s 2% target could be longer with the economic growth remain too strong, therefore upcoming data release is expected to continue reflect the economic strength.

Wednesday, 10th April 2024, 15:45 – BoC Interest Rate Decision

In March, BoC maintained the interest rate at 5.0 per cent for the fifth consecutive time, with Governor Tiff Macklem stating that it was premature to consider a reduction. In February, Canada’s inflation rate decelerated to 2.8 per cent. Economists forecast that Canadians may gradually witness interest rate reductions beginning with the Bank of Canada’s interest rate announcement on 5th June or later in the year, therefore the upcoming decision is unlikely to bring any unexpected developments.

Wednesday, 10th April 2024, 20:00 – FOMC Meeting Minutes

During the February meeting, the Federal Reserve displayed caution regarding the prospect of rapidly reducing interest rates. The meeting minutes suggested that they were not in a rush to decrease borrowing costs. Fed officials emphasized the need for further evidence before considering a shift in policy towards easing, while also indicating that the likelihood of rate hikes in the future was minimal. Given the continued strength of the U.S. economy, it is expected that the Fed will maintain a similar tone in the upcoming minutes.

Thursday,11th April 2024, 14:15 – ECB Interest Rate Decision (Apr)

The European Central Bank (ECB) opted to keep its benchmark interest rates unchanged at 4.50% during its March meeting as widely anticipated by market observers. However, eurozone inflation decreased more than economists had expected, slowly reinforcing the anticipation of monetary policy easing by the ECB in the coming months. Some ECB members suggested that the central bank might commence rate cuts as early as June, but they remain attentive to the Federal Reserve’s actions. Consequently, the market anticipates that interest rates will remain unchanged until then.