RBNZ Gov. Hawkesby says decision to hold a rate vote was a healthy signRecap: BoJ Ueda says Bank on alert to impact of super-long yield swings on borrowing costsBOJ likely to keep cutting bond purchases, says BofANZD/USD bouncing after the expected RBNZ 25bp cash rate cutChina MofCom offers strong opportunities to German SMEs to invest and growRBNZ cuts cash rate by 25bp vs. 25bp expectedWall Street Journal: Putin Has Retooled Russia’s Economy to Focus Only on WarAustralian monthly CPI (April 2025) 2.4% y/y (vs. 2.3% expected)Australian data – Q1 2025 Construction Work Done +0.0% q/q (vs. expected +0.4%)Japan is reportedly offering to buy up to $6.94 billion worth of US semiconductorsPBOC sets USD/ CNY mid-point today at 7.1894 (vs. estimate at 7.1996)KRW traders note – South Korea FX market to close June 3 for presidential electionUSD/JPY has ticked a little lower – we had Kato and Ueda speakingJapan finance minister Kato – Will closely monitor bond market situationsBank of Japan Governor Ueda says tariff negotiations means outlook remains uncertainFed’s Williams says wants to avoid inflation becoming highly persistentBarclays: US consumer spending to continue to decelerate, not improve much into year endAustralian monthly CPI due today – what to expect and why its not officialStandard Chartered sees near-term gold consolidation, targets $3,100 before renewed rallyNikkei forecast to rise to 39,600 by the end of 2025 (vs. February forecast 42,500)Trump says working on taking Fannie Mae and Freddie Mac public, implicit guarantees remainAUD and RBA terminal rate both seen higher – headwinds for Australia to diminishCiti sees risks, and also opportunity, for equities from Trump’s “One big, beautiful bill”Trump will charge Canada US61bn to join Golden Dome if it remains a free countryForexlive Americas FX news wrap 27 May: USD moves higher with stocks. Yields move lower.ICYMI: China’s Premier Li said fiscal expenditure will reach a record high this yearWall Street Journal: US to grant Chevron license to retain Venezuela oil assetsUS major indices have a solid start to the holiday shortened weekICYMI: Goldman Sachs: Tariff-driven inflation likely to be short-livedNZDUSD moves lower ahead of the RBNZ rate decisionTrade ideas thread – Wednesday, 28 May, insightful charts, technical analysis, ideas
Trump grabbed market attention with a series of posts on his social media platform amid scrutiny over allegations of profiting from issuing pardons. The posts appeared rushed, but one comment of note for markets was his renewed push to take Fannie Mae and Freddie Mac public. Importantly, Trump emphasised that the U.S. government would retain its implicit guarantees — a clarification not included in his previous remarks last week, when he said he was “seriously considering” taking the mortgage giants public.
From Tokyo, New York Fed President John Williams delivered remarks that suggest little appetite for rate cuts in the near term. He stressed that central banks must “respond relatively strongly” when inflation drifts from target, and warned against taking policy steps where the “cost of getting it wrong far outweighs the benefits,” especially given the high uncertainty around U.S. tariffs and trade policy.
Bank of Japan Governor Kazuo Ueda also spoke, flagging concern over recent volatility in Japan’s super-long bond yields. He noted that while shorter-term rates have more direct impact on economic growth, large swings in the long end could spill over and lift borrowing costs more broadly. Ueda added that fallout from US trade policy remains a significant source of uncertainty. That concern was reflected in the day’s 40-year JGB auction, which showed the weakest bid-to-cover ratio (2.2) since November and the softest demand since July.
Australia’s April monthly CPI came in a touch hotter than expected, with the headline holding steady at 2.4% y/y (vs 2.3% expected). The trimmed mean core measure rose to 2.8% y/y from 2.7% in March. While this is not the official quarterly inflation gauge used by the RBA — due in July — the data remains within the central bank’s 2–3% target band, keeping rate expectations finely balanced.
Across the Tasman, the Reserve Bank of New Zealand cut its official cash rate by 25 basis points to 3.25% in a 5–1 vote, as expected. The central bank now sees a slightly deeper easing path than it projected in February, with forecasts showing the cash rate at 2.92% in Q4 2025 and 2.85% in Q1 2026. The RBNZ warned that global uncertainties — particularly around U.S. trade policy — are expected to weigh on both international and domestic demand. NZD/USD moved higher in response and added further gains during Governor Hawkesby’s post-decision remarks, where he said policy is now in the “neutral zone” and not on a pre-set path.
The U.S. dollar strengthened modestly across the major pairs, extending Tuesday’s move — the New Zealand dollar being the notable exception.
This article was written by Eamonn Sheridan at www.forexlive.com.