Good morning,

Well the markets like to have confirmed what they already ‘know’ so the Kiwi jumped at the expected news of a 0.25% hike in the interest rate to 3.00%. Moves have been partially retraced across the board and expect some consolidation today. The general outlook according to the RBNZ statement is very gently pessimistic mentioning dairy auction prices, commodity prices falling and US tapering. Analysts are split on the implications for further rate hikes in June and July with May employment figures being key (released 7 May).

I am keen to see the Aussie make some moves after consolidation yesterday and I can say the same for USDJPY, which was moving up nicely but has stalled in the Asia session maybe due to the Nikkei losing ground on the back of this dispute with China and a lack of progress in the US trade talks. Nothing has particularly challenged our fundamental view on a bullish Aussie and a bearish Yen. But currently it is a case of taking some pips range trading until a new trend is established.