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The Reserve Bank of New Zealand will likely keep rates unchanged on 18 February. However, inflation and policy rate projections may be revised higher, at least partly validating tightening expectations for this year. We expect two rate hikes from 3Q, taking rates to 2.75% by year-end and offering medium-term support to NZD.

The latest RBNZ projections from November 2025 have proved too optimistic on disinflation. Fourth‑quarter CPI came in at 3.1% YoY versus the bank’s 2.7% estimate, and non‑tradable CPI at 3.5% versus the 3.2% projection. This raises the question of whether the RBNZ cut rates too aggressively last year.

The next few quarterly prints may be a make‑or‑break moment for NZD. Another hot reading could leave the RBNZ with little choice but to start considering rate hikes later this year. However, the 1Q CPI report is only published on 20 April, and there are two RBNZ meetings before then (18 February and 8 April) that should offer some guidance on the policy path. (ING – Continue Reading)

A leading measure of investor confidence in Germany is expected to show growth for a third straight month as the country gears up to become increasingly responsible for its own defence.

An analysts’ poll predicted that the forward-looking economic sentiment reading from a survey conducted by Germany’s ZEW economic institute will improve to 65.0 points from last month’s 59.6, which was the best showing since July 2021.

The institute’s current conditions indicator is expected to stay in negative territory – its home since December 2021 – by improving to -65.7 from -72.7 in December.

“The ZEW will very likely show an improvement similar to what the Sentix did,” Oxford Economics wrote, referring to another German monthly poll of investor confidence. (LiveSquawk – Continue Reading)

For more than a decade, Kevin Warsh has advocated reining in the Federal Reserve’s pivotal role in the nation’s financial markets.

Now, as President Donald Trump’s choice to lead the Fed, he may finally get the chance to do that, aided by a Treasury secretary with the same goal. And Wall Street is obsessed with finding out what comes next — ‌bracing for the possibility of extensive market disruptions.

Warsh has bemoaned the Fed’s purchase of trillions of dollars in U.S. government debt and bundled mortgages after both the 2008 financial crisis and the 2020 pandemic, a process that kept longer-term interest rates down to boost the economy and flooded banks with cash reserves. (POLITICO – Continue Reading)

Another week when “It could’ve been worse” passes for a declaration of victory on Wall Street, as traders navigate mini-crashes rolling through one sector after the next and investors try to draw nourishment from the relative outperformance of a majority of stocks.

The S&P 500 was about flat last week and finished at a level first reached 112 calendar days ago, that late-October moment the market was excitedly pricing in a cheery backdrop of an economic upturn augmented by Federal Reserve “insurance” rate cuts and energized by an AI investment boom that promised more creation than destruction.

It’s now a market prompting more pointed questions and suggesting only equivocal answers: (CNBC – Continue Reading)