Kiwi crossroads – a cut the market has priced, guidance it hasn’t

On Wednesday, the Reserve Bank of New Zealand is almost universally expected to trim its official cash rate by 25 bp to 3.25 %, extending 200 bp of easing since August. Swaps discount another 50 bp by year-end, but with Q1 inflation back inside the 1-3 % target band, Governor Adrian Orr’s fresh forecasts—particularly the projected terminal rate and unemployment path—will carry more weight than the decision itself.

For NZD/USD, limited downside is expected if the statement avoids an unequivocally dovish tilt; a hawkish surprise could unlock a move toward September’s 0.6380 peak.

Australia – inflation litmus after RBA’s dovish pivot

The Reserve Bank of Australia shocked no-one last Tuesday by cutting to 3.85 %, but Governor Michelle Bullock signalled further easing was possible.

• April CPI (Wed) – consensus 3.2 % y/y after 3.5 % in March. A downside surprise would cement July cut odds; an upside miss might nudge the RBA back to the sidelines.
• Q1 private-sector capex (Thu) – the first hard read on investment sentiment since tariffs re-escalated.
• Bullock meets Chinese counterparts in Beijing (Wed-Fri), a timely chance to discuss tariff fallout.

AUD/USD already punched through its 200-DMA at 0.6496; 0.6550 is the next resistance.

Japan – Ueda speaks while bond auctions test resolve

Bank of Japan Governor Kazuo Ueda opens a policy conference on Tuesday; the market will parse his remarks for hints on the next 10 bp rate hike. Long JGB yields hit decade highs last week as investors demanded extra term premium, mirroring global curves.

Friday brings a macro bundle—Tokyo CPI, unemployment, retail sales, industrial production, housing starts—with the Tokyo CPI acting as an early read-through to national inflation. Analysts expect core inflation to edge up on surging rice prices.

USD/JPY is pinned near 142, with a stack of expiries at 141.75-142.00 acting as near-term gravity; a weaker dollar could unleash a test of 140.00.

China – PMI prism for sentiment

Industrial profits (Tue) and the official May PMIs (Sat) provide the first post-tariff snapshot of factory morale. The manufacturing index last printed 50.5—its best in a year—but economists warn the bounce may fade if export orders wobble.

A stronger reading would bolster commodities and the Aussie; a relapse below 50 risks reigniting hard-landing talk.

India & ASEAN – riding the weaker-dollar wave

Relief from the tariff delay lifted the rupee above 85/$ and helped local equities to fresh records, aided by the RBI’s record dividend transfer. With no tier-one data, INR direction hinges on global risk appetite and oil prices.

Elsewhere, Bank of Korea meets Thursday and is leaning toward its own 25 bp cut as exports sputter.

Commodities – OPEC+ and gold in focus

Traders expect OPEC+ to confirm another 0.41 mbd production increase for July on Sunday. Anything larger could drag Brent toward $66; a surprise pause would squeeze shorts.

Gold’s 2 % jump last Friday underlined how quickly haven demand erupts; Monday’s 0.3 % pull-back shows it ebbs just as fast. The metal remains on an up-trend channel above $3,300/oz, supported by central-bank buying and a Fed that appears stuck on hold.

Equity pulse – chips, steel and tariffs

Nvidia’s results (Thu) could set the tone for Asia’s vast semiconductor complex after Reuters flagged that Washington may allow a cheaper “Blackwell” AI chip for China. A guidance haircut would ripple through Taiwan, Korea and Japan.

Tokyo steelmakers will watch the political saga around Nippon Steel’s bid for U.S. Steel after Trump promised Washington would “control” the asset—an intervention that could complicate cross-border M&A.

Risk radar – five flashpoints

Investment stance

• FX – Stay long EUR and GBP vs USD; short USD/JPY for 140 target; tactical long NZD into the RBNZ but reduce before the statement.
• Rates – Fade rallies in U.S. 10-year above 5 %; buy Aussie front-end on CPI downside surprise.
• Commodities – Maintain core gold allocation; hedge Brent longs ahead of OPEC+.
• Equities – Overweight Asia tech but hedge with SOX puts into Nvidia; rotate into FTSE 100 exporters on sterling strength.

Bottom line

Asia starts the week surfing a weaker-dollar wave, but macro data and central-bank rhetoric will decide whether the move has legs. With tariff deadlines merely postponed, investors should treat the calm as temporary and keep risk budgets flexible.