New Zealand’s central bank holds rates steady for 1st time in 2 years
The Reserve Bank of New Zealand kept interest rates unchanged for the first time in nearly two years at its meeting on Wednesday, as one of the world’s most hawkish central banks slows its monetary tightening.
The official cash rate was held at 5.5 per cent, having been raised 12 times from 0.25 per cent since August 2021. The rate should “remain at a restrictive level for the foreseeable future”, the central bank added.
The RBNZ was one of the earliest among advanced economy central banks to begin raising rates as the world recovered from the Covid-19 pandemic. It repeatedly warned that persistent inflation meant higher interest rates were required.
Asia-Pacific currencies rise against dollar ahead of US CPI data
Asia-Pacific currencies rose on Wednesday, as traders awaited US inflation data that is expected to show price rises moderated in June.
The yen gained 0.6 per cent to trade at ¥139.46 per US dollar, close to its strongest level in nearly a month, while the renminbi strengthened 0.3 per cent to Rmb7.1853.
The Australian dollar rose 0.5 per cent to A$0.672.
The US consumer price index data scheduled for Wednesday is expected to show a rise of 3.1 per cent in June, according to a Reuters poll, in the slowest rate of inflation since March 2021.
That has bolstered expectations that the Federal Reserve will stick with a pause in its monetary tightening cycle.
What to watch in Asia today
Events: In South Korea, the trial begins of former Samsung executive Choi Jin-seok, accused of stealing sensitive information to help set up a chip factory in China. Tokyo District Court is due to hand down a ruling on Shinichi Ueno, former head of advertising agency ADK, over the 2020 Olympic Games bribery scandal. Reserve Bank of Australia governor Philip Lowe delivers a speech on the economy, while the Reserve Bank of New Zealand holds a monetary policy review.
Corporate results: India’s Tata Consultancy Services issues a first-quarter trading update.
Economic data: Japan machinery orders data for May to be released by the cabinet office. The country’s producer price index reading is also expected. Malaysia issues industrial production and retail sales figures, while India releases the latest consumer price index and industrial production numbers. The Philippines releases May foreign investment data and New Zealand announces visitor arrivals for that month.
Markets: Futures contracts pointed higher in Hong Kong and Tokyo on Wednesday morning. The S&P 500 added 0.7 per cent and the Nasdaq Composite rose 0.5 per cent on Tuesday, ahead of inflation data that traders will look to for clues about the future path of US interest rate rises.
Biden and Erdoğan discuss bilateral relations in ‘first step’ meeting
US president Joe Biden discussed bilateral relations with Turkish counterpart Recep Tayyip Erdoğan and praised his decision to support Sweden’s bid to join Nato, in a meeting at the military alliance’s summit in Vilnius, Lithuania.
The leaders discussed their defence and economic priorities, and shared interests such as their support for Ukraine against the Russian invasion, and “preserving stability in the Aegean,” according to the White House.
The Turkish leader said the meeting with Biden was a “first step” in repairing strained relations between the countries. “Our meetings prior to this were mere warm-ups, but now we are initiating a new process.”
Salesforce jumps the most in 4 months on plan to raise prices
Salesforce notched its biggest one-day gain in four months after the software group announced price rises for some of its products, the first increase in seven years.
The San Francisco-based company said it would raise list prices of its products, which include Sales Cloud and Tableau, in August by an average of 9 per cent.
Shares closed 3.9 per cent higher on Tuesday, their biggest jump since mid-March. That extended a rally that has left them up about two-thirds since the start of the year.
Salesforce has taken steps to focus on profits in an effort to appease activist investors. The group called a truce with Elliott Investment Management in March.
Zelenskyy tells summit Ukraine will make Nato alliance ‘stronger’
President Volodymyr Zelenskyy told a rally in Vilnius that “Ukraine will make the alliance stronger” after Nato leaders agreed in a summit communiqué to grant Kyiv an invitation to join.
Zelenskyy said that he arrived in Vilnius “with faith in the decision” for Ukraine to be offered to join the defence bloc, “with faith in our partners, with faith in a strong Nato that does not hesitate, does not waste time and does not look back at any aggressor”.
Speaking to a roaring crowd on Tuesday evening, Zelenskyy said that he believes Ukraine’s fight is in defence of all of Europe.
UK postal workers union back deal with Royal Mail
UK postal workers have backed a deal on pay and changes to working practices at Royal Mail, concluding a dispute that had deeply disrupted mailing services and led to one of the biggest crises in the 507-year-old organisation’s history.
The Communication Workers Union said on Tuesday that over three-quarters of the 67 per cent of members who voted had supported its deal agreed with Royal Mail in April.
The announcement follows 18 days of strike action during the final quarter of 2022, amid a dispute that centred on Royal Mail’s plans to adapt working practices in response to growing demand for online shopping deliveries and competition from the likes of Amazon.
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