German inflation stood at 2.8% y/y for headline HICP, thus slightly higher than the 2.7% consensus amongst analysts. It is however worth noting that headline inflation was affected by the so-called 'German ticket', a discount on public transportation which has lowered headline inflation. Given its introduction more than a year ago, the base effects of the discount are no longer affecting the inflation print.
The JPY continues to weaken with USD/JPY hitting as high as 155.48 in overnight trading. The Japanese monetary and fiscal authorities have earlier said that they are concerned with the continuously weakening of the JPY, and have threatened to intervene in the market over several occasions, but we are still to see some action on the matter.
In New Zealand, the Reserve Bank of New Zealand (RBNZ) held monetary policy unchanged overnight, as expected. In contrast to other G10 central banks eyeing the start of their respective rate cutting cycles, markets have speculated in an additional rate hike from the RBNZ, but the tone of today's announcement was clearly to the dovish side, suggesting that the current level of policy rate is seen as sufficiently restrictive. We expect NZD/USD to decline further over the coming year, with 12M target at 0.57.
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