Sample Category Title

• As widely expected, the RBNZ retained the OCR at 2.25%. There was no vote, with the decision reached by consensus.
• The commentary was hawkish as concerns of rising second-round inflation pressures were quite prominent.
• The MPC debated the options of an earlier vs later beginning to interest rate normalisation. Interest rate cuts were not discussed.
• An earlier start was described as May or July. A hike was discussed as an option today, but the Governor said that the MPC was not close to hiking at this meeting.
• The RBNZ’s short-term inflation forecast is now 4.2%y/y in June 2026 – higher than before, but close to our 4.1% forecast.
• We have pulled forward our forecast for the first OCR hike from the RBNZ to September (previously December).
• The balance of risks is towards an earlier start to hikes than September, should evidence of second-round inflation impacts accumulate.

OCR retained at 2.25% but coupled with a hawkish outlook.

The RBNZ kept the OCR unchanged at 2.25% as expected. There was no vote, with the decision reached by consensus. However, the Bank’s commentary adopted a more hawkish tone than expected. There was no discussion of needing to cut the OCR despite acknowledging that, at least in the short term, there would be greater excess capacity than previously thought. Rather, the debate was between:

• a “a pre-emptive response to medium-term inflation pressures could guard against the risk of inflation expectations becoming unanchored”; or
• a gradual increase in the OCR towards “more neutral levels” to reduce the risk of “reacting to higher nearterm inflation and accentuating weakness in the real economy and labour market”.

In the press conference the Governor noted that the MPC discussed the possibility of raising the OCR at this meeting, but there had been “no strong advocate” for doing so.

We interpret the more gradual path as being something akin to the late 2026 lift-off date that we have been forecasting, and that the RBNZ largely had in mind at the February meeting. A pre-emptive response likely implies something faster that begins by September but could come sooner than that, should evidence of secondround inflation impacts begin to accumulate. Indeed, the Governor indicated that the pre-emptive approach could have been a tightening in May or July. More dovish members were uncomfortable with the risks of that.

Key evidence that the RBNZ seeks seems to be in the form of anecdotal evidence on pricing and wage setting behaviour combined with higher frequency evidence on price setting, costs and inflation expectations coming from monthly surveys. We think it likely that at least some evidence along these lines will accumulate given the broad-based cost shock that the economy is facing. As a result, an earlier than December beginning to the tightening cycle looks much more likely now.

Hence, we are bringing forward our existing 25bp per meeting tightening profile to begin in September. The OCR will thus end 2026 at 3% and reach the previously expected 4.25% peak earlier, in September 2027. Easing is forecast to begin a year later in September 2028 with the neutral OCR reestablished in December 2028.

An earlier start than September should not be ruled out. And given it’s likely easier to explain the tightening profile in a Monetary Policy Statement meeting then the bias is likely for an earlier move to come in May versus July. The key question is: will sufficient evidence of second-round inflation impacts have accumulated by then? We think that’s still an open question at this point.

Key quotes from the press release and Record of Meeting were:

• “The Monetary Policy Committee is focused on ensuring that inflation returns to the 2-percent target midpoint over the medium term. This requires core inflation and wage growth to remain contained and medium- and long-term inflation expectations to remain around 2 percent. If these conditions are not met, decisive and timely increases in the OCR would be required.”
• “The outlook for medium-term inflation pressures depends on the size and persistence of the inflationary impulse stemming from higher oil prices and the extent to which it is offset by weaker demand in the economy.”
• “If the increase in near-term inflation is largely temporary, the Committee envisages gradually moving the OCR to more neutral levels as activity recovers and near-term inflationary pressures dissipate. However, any signs of significant secondround inflationary effects or increases in medium-term inflation expectations would require decisive and timely increases in the OCR to re-anchor inflation expectations.”
• “On the timing of any increase in the OCR, members discussed that a pre-emptive response to mediumterm inflation pressures could guard against the risk of inflation expectations becoming unanchored and reduce the extent of second round price increases.”
• “Conversely, the Committee noted the risk of reacting to higher near-term inflation and accentuating weakness in the real economy and labour market. Members noted that this could cause unnecessary volatility in output and employment if the conflict was resolved in the near term or if the economic outlook weakens by more than currently expected.”

The RBNZ’s initial thoughts on the near-term outlook.

The RBNZ provided updated inflation forecasts for the next two quarters. This is a change from their usual practice of not releasing updates to their forecasts at interim reviews and reflects that recent geopolitical developments have in the RBNZ’s words “materially altered the outlook and the balance of risks for inflation and economic growth”.

The RBNZ now expects inflation of 3% in the March quarter (previously 2.8%), rising to 4.2% in the June quarter (previously 2.7%). Those updated figures are close to our own forecasts. The RBNZ did not provide forecasts further ahead.

The RBNZ has noted that higher energy costs will push up other prices in the economy. However, longer term impacts on wage and price setting (aka. ‘second round impacts’) are expected to be constrained by weak demand at this stage. This is a key area of uncertainty and one where the RBNZ will be watching closely for signs that longer-term inflation pressures are increasing. Indeed, the RBNZ went on to note that “any signs of significant second-round inflationary effects or increases in medium-term inflation expectations would require decisive and timely increases in the OCR to re-anchor inflation expectations. The Committee is vigilant to these risks.”

While the RBNZ did not provide forecasts for other variables, they noted that the conflict and related increases in both operating costs and economic uncertainty will result in weaker activity in the near term. That’s very much in line with our own thoughts.

Things to watch ahead of the next meeting.

The RBNZ’s next policy review is on 27 May, when it will also publish a full Monetary Policy Statement (MPS) with refreshed forecasts (and probably some alternative scenarios too considering the current level of uncertainty). How the RBNZ’s stance evolves between now and then will depend on the path the Middle East conflict takes; what early indicators and anecdote suggest about the impact of the conflict on activity and inflation, both in New Zealand and abroad; and any developments in financial markets as a result of the conflict or other vulnerabilities triggered by the conflict.

As far as domestic economic indicators are concerned, we think the following are key ones to watch.

• Q1 CPI (21 April) and April Selected Prices (15 May): These pricing indicators will reveal the initial firstround direct and indirect impacts of the recent surge in fuel prices. They will provide some insight as to how high headline inflation might peak, but not about how long it will remain at elevated levels.
• Q1 QSBO (21 April) and April/May ANZ Business Outlook (30 April/27 May): Unfortunately, the data-rich QSBO survey was initially in the field very early in the conflict (it is unclear whether a breakdown of early and late responses will be released). Therefore, the ANZ surveys may provide a more up-to-date account of how businesses are responding to the conflict.
• March/April PMI and PSI surveys (mid-April/mid- May): These may provide some early insight regarding the likelihood of a contraction in GDP in Q2.
• Q1 labour market surveys (6 May): Employment and hours worked data from the HLFS and QES surveys will cast light on what momentum the economy had going into the conflict, while the LCI will cast light on underlying inflation pressures.
• Budget 2026 (28 May): While the formal unveiling of the Budget comes the day after the release of the MPS, ahead of the Budget the RBNZ’s MPC will receive a high-level briefing from the Treasury on what to expect at the macro level. Pre-Budget speeches and policy announcements may reveal more in the public sphere.

In addition to the above, we will be monitoring a range of other high-frequency indicators, such as monthly data on filled jobs, consumer spending, building consents, housing market activity and prices, job ads and consumer confidence. We will also be paying close attention to developments in prices for New Zealand’s key export commodities. The RBNZ looks to also be focused on anecdotal evidence of business pricing and wage setting behaviour – although that will be harder to track.

Gold (XAUUSD) reached an all-time high of $5598.75 on January 29 before undergoing a notable correction. This decline unfolded in a 3 Elliott waves zigzag structure, ultimately finding support at $4094.63. We have identified this corrective phase as wave (IV). Since then, the metal has resumed its upward trajectory, entering wave (V). To fully confirm the bullish outlook, however, gold must decisively break above the prior peak of $5598.75. Without such a move, the risk of a double correction remains present.

The short-term rally from the wave (IV) low has already displayed a five-swing structure. This pattern is characteristic of a motive sequence, which generally signals continuation rather than exhaustion. Consequently, the technical picture favors further upside momentum. From the wave (IV) base, wave 1 concluded at $4512.85, followed by wave 2 at $4350.52. Wave 3 extended higher to $4800.46, while the subsequent pullback in wave 4 ended at $4553.16. Current price action suggests that wave 5 is nearing completion. Once finalized, this will mark the end of wave (1) at a higher degree.

Afterward, gold is expected to retrace in wave (2). This corrective phase should address the cycle that began from the March 23 low. Such a pullback would be a natural development within the broader bullish structure, setting the stage for renewed strength. If the outlined progression holds, the metal could establish a sustainable advance beyond its previous record high.

Gold (XAUUSD) 60-Minute Elliott Wave Chart

XAUUSD Elliott Wave Video:

https://www.youtube.com/watch?v=PKRrBd3WawQ

In focus today

All focus this morning is on the ceasefire in the Middle East and the impact on energy prices. Markets will closely monitor any information released on expectations for oil and gas flows.

Tonight, the minutes from FOMC March meeting are due for release. The minutes may get less attention than usual as the war in Iran was only in its early stages at the time of the meeting. That said, we will keep an eye out for any forward guidance on the balance sheet operations, which the Fed has lately provided mostly in the minutes.

Economic and market news

What happened overnight

In the US-Iran war, President Trump agreed to a two-week ceasefire with Iran just two hours before his deadline for Iran to reopen the Strait of Hormuz. Iran agreed to halt attacks and provide safe passage through the strait, while the US and Israel committed to the terms of the truce. Brent crude fell as low as USD92/bbl on the news, but the drop in prices is contingent on the pre-condition that traffic through the Strait of Hormuz resumes. For prices to stabilise at lower levels, oil and gas flows through the strait must pick up again, which remains uncertain. The deal looks fragile, particularly as Iran is allowed to charge fees on ships passing through. Stock markets surged, with S&P 500 futures rising over 2% and European futures up more than 5%, while the US dollar weakened on improved risk sentiment. The war is now in its sixth week, and scepticism remains about whether the ceasefire will hold, as many view it as a trust-building exercise. Significant uncertainties persist, and the oil market and broader markets are likely to stay volatile as they monitor activity from the Gulf.

In New Zealand, the Reserve Bank (RBNZ) kept its official cash rate unchanged at 2.25% during its April meeting, as expected. The central bank highlighted that rising oil and fuel prices driven by Middle East tensions are adding to near-term inflation pressures while weighing on economic growth. The RBNZ reiterated its focus on medium-term inflation, emphasising the importance of containing core inflation, wage growth, and inflation expectations.

What happened yesterday

In the euro area, the April Sentix investor confidence indicator declined to -19.2, its lowest level in a year, reflecting concerns over the war in Iran. The monthly drop is comparable to the sentiment deterioration seen in April last year following Trump's "Liberation Day" and is about two-thirds of the decline observed in March 2022 when the war in Ukraine began.

In Sweden, March inflation surprised on the downside, with CPI at 0.6% y/y (cons: 1.2%), CPIF at 1.6% y/y (cons: 2.2%), and CPIF-XE at 1.1% y/y (cons: 1.5%). Food prices declined -0.7% m/m, more than anticipated, while energy prices fell sharply by -5.3%, driven by milder weather lowering electricity costs after elevated levels in January and February. The data does not yet reflect any impact from the war in Iran, with the lower reading likely attributable to seasonality. Sweden's April services PMI rebounded strongly to 55.7 in March (prior: 48.3), supported by higher order intake and business volumes. Price pressures also rose, presenting a somewhat hawkish signal in contrast to the earlier low inflation print.

In Denmark, the Danish central bank did not sell EUR/DKK in FX intervention in March, where EUR/DKK hit 7.4728. This aligns with our expectation that it will allow the pair to rise to 7.4730-50 range before stepping into the market.

In the US, health insurers rallied after the government announced a 2.48% average increase in 2027 Medicare Advantage payment rates, exceeding the 0.09% proposed in January. The USD 13bn boost is expected to improve margins, with shares of UnitedHealth, CVS Health, and Humana rising in response.

Equities: The ceasefire agreed overnight between Iran, the US and Israel is clearly dominating market action this morning. What we are seeing is a classic "big war/cease fire reversal trade" across asset classes and equities.

In Asia, there is a pronounced cyclical rotation, led by tech, with the semiconductor space up around ~10% this morning. Defensives and low-vol stocks are underperforming, while energy is a clear laggard, down roughly 7%.

We will refrain from going into the details of the various statements from US and Iranian officials leading up to this, but once again this outcome is fully consistent with Trump's well-known negotiation tactics - maximum pressure followed by a "TACO"-style de-escalation. This remains the relevant framework for interpreting developments going forward, also as we approach the expiry of the two-week ceasefire. Importantly, this is only a ceasefire, and a lot can still go wrong, but it goes without saying that this is a step in the right direction. European equity futures are up around ~5% this morning, while US futures are higher by ~2-3%.

FI and FX: With Trump's deadline fast approaching, the US president announced a two-week ceasefire with Iran. This provided an imminent relief for markets, with oil prices collapsing below USD100/barrel, US yields falling by more than 10bp across the curve and EUR/USD rallying towards 1.17. The SEK, which weakened through yesterday's session on the back of lower-than-expected Swedish inflation, rallied sharply on the ceasefire announcement. As for the NOK, which is caught by opposing forces, EUR/NOK remains below 11.20. Although a lot of uncertainty still prevails, especially beyond the two-week ceasefire, risk sentiment seems to have turned and will likely act supportive for the time being.

Daily Pivots: (S1) 159.39; (P) 159.71; (R1) 159.94; More...

USD/JPY is extending the corrective pattern from 160.45 high with another falling leg, and outlook is unchanged. Intraday bias remains neutral, and further rise is expected as long as 157.49 cluster support (38.2% retracement of 152.25 to 160.45 at 157.31) holds. Firm break of 160.45 will resume the rise from 152.25 to retest 161.94 high. However, firm break of 157.31/49 will bring deeper fall back to 61.8% retracement at 155.38 next.

In the bigger picture, outlook is unchanged that corrective pattern from 161.94 (2024 high) should have completed with three waves at 139.87. Larger up trend from 102.58 (2021 low) could be ready to resume through 161.94. This will remain the favored case as long as 55 W EMA (now at 152.97) holds. Firm break of 161.94 will pave the way to 61.8% projection of 102.58 to 161.94 from 139.87 at 176.75.

Daily Pivots: (S1) 0.7962; (P) 0.7987; (R1) 0.8002; More….

USD/CHF's fall from 0.8041 resumed by breaking through 0.7904. Immediate focus is now on 0.7877 cluster support (38.2% retracement of 0.7603 to 0.8041 at 0.7874). Decisive break there will argue that whole rise from 0.7603 as completed, and bring deeper fall to 61.8% retracement at 0.77706 and below. Nevertheless, strong bounce from 0.7874/7 will retain near term bullishness for another rise through 0.8041 at a later stage.

In the bigger picture, rebound from 0.7603 medium term bottom is seen as correcting the fall from 0.9200 only. rejection by 55 W EMA (now at 0.8081) will affirm this case, and setup down trend resumption to 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382 at a later stage. Though, sustained break of 55 W EMA will suggest that it's probably correcting the larger scale down trend from 1.0146 (2022 high).

Daily Pivots: (S1) 1.3236; (P) 1.3268; (R1) 1.3327; More...

GBP/USD's rebound from 1.3158 accelerated higher today and immediate focus is now on 1.3479 resistance. Decisive break there will argue that fall from 1.3867 has completed as a correction at 1.3158. Intraday bias will be turned back to the upside for retesting 1.3867 high. Nevertheless, rejection by 1.3479 will keep near term outlook bearish for a break through 1.3158 low at a later stage.

In the bigger picture, considering bearish divergence condition in both D and W MACD, a medium term top should be in place at 1.3867. Firm break of 1.3008 support will argue that fall from 1.3867 is at least correcting the rise from 1.0351 (2022 low) with risk of bearish reversal. That would open up further decline to 38.2% retracement of 1.0351 to 1.3867 at 1.2524. For now, medium term outlook will be neutral at best as long as 1.3867 resistance holds, or until further development.

Daily Pivots: (S1) 1.1546; (P) 1.1575; (R1) 1.1627; More….

EUR/USD's extended rally and break of 1.1666 cluster resistance (38.2% retracement of 1.2081 to 1.1408 at 1.1665) now suggests that whole decline from 1.2081 high has completed at 1.1408. The is also supported by the strong break of 55 D EMA. Intraday bias is back on the upside for 61.8% retracement of 1.2081 to 1.1408 at 1.1824. Firm break there will pave the way to retest 1.2081 high. For now, risk will stay on the upside as long as 1.1503 support holds, in case of retreat.

In the bigger picture, the strong support from 38.2% retracement of 1.0176 to 1.2081 at 1.1353 suggests that the pullback from 1.2081 is more likely a corrective move. Strong support was also found in 55 W EMA (now at 1.1505). Focus is back on 1.2 key cluster resistance level. Decisive break there will carry long term bullish implications. Nevertheless, break of 1.1408 support will revive the case of medium term bearish trend reversal.

Dollar’s sharp slide as oil price drops below $100 on the US-Iran ceasefire is raising a critical question for FX markets: whether the unwinding of war premium is now enough to push EUR/USD back toward the 1.20 psychological level. The move reflects a rapid shift from pricing disruption to pricing partial normalization—but the path forward remains conditional.

The turnaround was triggered just 90 minutes before the U.S. deadline for a major strike, when President Donald Trump announced a “double sided CEASEFIRE”. This followed days of extreme rhetoric, including warnings that “a whole civilization will die tonight”. The agreement also includes a safe reopening of Hormuz, allowing tanker flows to resume. This is triggering supply normalization, alongside an insurance premium collapse that had effectively frozen shipments over the past weeks.

Markets reacted with a powerful risk-on rotation. Equities surged across Asia, with South Korea’s KOSPI jumping around 6.5% and Japan’s Nikkei rising close to 5%.

The easing in energy markets feeds directly into macro expectations. Lower oil prices reduce inflation pressure, weakening the case for prolonged restrictive monetary policy. The result is an inflation shock unwind. This is where the Fed narrative comes into play. If oil continues to fall and inflation pressures ease, markets may begin to price a renewed Fed pivot toward a more dovish stance. That would further erode the Dollar’s, reversing its rally since late January.

That would provide the macro foundation for EUR/USD to extend higher, with prospect of retesting the key psychological and technical level at 1.20.

However, the move toward 1.20 for EUR/USD is not automatic. It hinges on whether current progress evolves into something more durable. Oil moving toward $90—and especially toward $80—would signal deeper normalization and strengthen the case for a sustained Dollar reversal.

Here, geopolitics becomes critical. The involvement of Pakistani Prime Minister Shehbaz Sharif and Field Marsh Asim Munir signals the emergence of a viable mediation channel. Additionally, Trump himself acknowledged Iran’s proposal as a “workable basis” for negotiation, suggesting a path toward resolution.

Yet, the situation remains fluid. Iranian Foreign Minister Abbas Araghchi emphasized that passage through Hormuz is currently “via coordination with Iran’s Armed Forces.” Any “misunderstandings” or skirmishes during this two-week window could quickly bring back war premium and halt the current rally.

The next major milestone is the Islamabad talks scheduled for Friday. If a formal U.S. delegation—potentially led by Vice President JD Vance—participates, the probability of oil moving toward $80 rises significantly. That would be a key signal that markets are transitioning from relief to genuine normalization.

In the currency markets, Kiwi is currently the leader for the day, additionally supported by RBNZ's hawkish hold. Aussie is the second strongest, and then Swiss Franc. Dollar is the runaway loser at the bottom, followed by Loonie which is apparently pulled down by oil prices. Euro is the third worst. Sterling and Yen are positioning in the middle.

In Asia, at the time of writing, Nikkei is up 5.19%. Hong Kong HSI is up 3.16%. China Shanghai SSE is up 2.03%. Singapore Strait Times is up 0.81%. Japan 10-year JGB yield is down -0.046 at 2.364. Overnight, DOW fell -0.18%. S&P 500 rose 0.08%. NASDAQ rose 0.10%. 10-year yield rose 0.008 to 4.343.

Oil Drops Below $100 on US-Iran Ceasefire, But $80 Seen as Floor Without Peace Deal

Oil has dropped below $100 as the US-Iran ceasefire unwinds war premium, but the absence of a peace deal means prices may stabilize above $80. Markets are pricing relief—but not resolution. Read More.

RBNZ Holds, Warns of “Decisive” Hikes if Inflation Expectations De-Anchor

RBNZ kept rates unchanged—but signaled it won’t hesitate to act. A warning of “decisive” hikes has put inflation expectations at the center of the policy outlook. Read More.

EUR/USD Daily Outlook

Daily Pivots: (S1) 1.1546; (P) 1.1575; (R1) 1.1627; More….

EUR/USD's extended rally and break of 1.1666 cluster resistance (38.2% retracement of 1.2081 to 1.1408 at 1.1665) now suggests that whole decline from 1.2081 high has completed at 1.1408. The is also supported by the strong break of 55 D EMA. Intraday bias is back on the upside for 61.8% retracement of 1.2081 to 1.1408 at 1.1824. Firm break there will pave the way to retest 1.2081 high. For now, risk will stay on the upside as long as 1.1503 support holds, in case of retreat.

In the bigger picture, the strong support from 38.2% retracement of 1.0176 to 1.2081 at 1.1353 suggests that the pullback from 1.2081 is more likely a corrective move. Strong support was also found in 55 W EMA (now at 1.1505). Focus is back on 1.2 key cluster resistance level. Decisive break there will carry long term bullish implications. Nevertheless, break of 1.1408 support will revive the case of medium term bearish trend reversal.

The Reserve Bank of New Zealand held the Official Cash Rate at 2.25% as expected, but struck a clearly hawkish tone, warning it stands ready to deliver “decisive and timely increases” if inflation expectations begin to de-anchor. The decision underscores a policy stance that is on hold for now, but increasingly alert to upside inflation risks.

In its summary record, the RBNZ emphasized the uncertainty surrounding the inflation outlook, noting that the impact of the Middle East conflict will depend on how opposing forces evolve. Policymakers made clear that the balance of risks is shifting. “Any signs of significant second-round inflationary effects or increases in medium-term inflation expectations would require decisive and timely increases in the OCR,” the Committee said.

The central bank outlined a conditional path. If recent inflation pressures—largely driven by higher oil prices—prove temporary, the RBNZ would expect to move "gradually" toward more neutral policy settings as growth recovers. However, the emphasis on second-round effects signals growing concern that price pressures could become more persistent.

The discussion revealed a divergence within the Committee. Some members favored a more "pre-emptive response" to guard against inflation expectations drifting higher, while others stressed downside risks to growth and argued for patience. This split highlights the difficulty of calibrating policy in an environment shaped by both external shocks and domestic fragility.

Overall, the RBNZ delivered a hawkish hold that supports a tightening bias without committing to immediate action. The bar for future hikes has lowered if inflation expectations begin to shift. Markets are likely to interpret this as a signal that the next move, while not imminent, would be upward.

Full RBNZ statement here.

Key Highlights

• Gold started a fresh increase above the $4,500 zone.
• A major bearish trend line is forming with resistance at $4,735 on the 4-hour chart.
• WTI Crude Oil trimmed gains and traded below the $105 pivot level.
• Bitcoin regained traction and climbed above $71,500.

Gold Price Technical Analysis

Gold reclaimed the $4,250 pivot level and started a fresh increase against the US Dollar. The price cleared the $4,400 and $4,500 resistance levels.

The 4-hour chart of XAU/USD indicates that the price even surpassed the $4,500 resistance zone. Finally, the bears appeared near the $4,800 zone and the 100 Simple Moving Average (red, 4 hours). There is also a major bearish trend line forming with resistance at $4,735.

If there is another decline, Gold might find bids near the $4,430 level. The first major support sits at $4,365 or the 61.8% Fib retracement level of the upward move from the $4,098 swing low to the $4,800 high.

The next support could be $4,320, below which the price might slide to $4,265. The main support sits at $4,120. Any more losses might call for a test of $4,020 or even $4,000 in the coming days.

On the upside, immediate resistance is $4,750 and the trend line. The next major resistance sits near $4,800. The main resistance could be near the trend line at $4,900 and the 200 Simple Moving Average (green, 4 hours).

A clear move above $4,900 could open the doors for more upside. In the stated case, the bulls could aim for a move toward $5,000 or even $5,200.

Looking at WTI Crude Oil, the price failed to extend gains above $115 and started a fresh decline below the $105 support.

Economic Releases to Watch Today

• Fed's Daly speech.
• FOMC Minutes.