2025 Market Outlook: Key January Events to Watch 
South Korea Signals Possible Interest Rate Hike as Inflation Remains Elevated 
Geopolitical Shocks That Could Reshape Financial Markets in 2025 
China Sets 1.25% Overnight Reverse Repo Rate Below Market Expectations 
JPMorgan Cuts Gold Price Forecast, Sees Bullion Reaching $4,500 by End of 2026 
Gold Surges Past $4150 on Dovish Fed Signals and Weak Jobs Data; Bullish Outlook Prevails 
BoE Policymaker Alan Taylor Signals No Need for Interest Rate Hike Amid Iran War Inflation Risks 
BOJ Raises Interest Rates to 1% as Inflation Pressures Persist 
Morgan Stanley Names BAE Systems Top European Defence Stock Despite Lower Price Target 
China’s Growth Faces Structural Challenges Amid Doubts Over Data 
Moldova Criticizes Russia Amid Transdniestria Energy Crisis 
Malaysia Central Bank Moves to Support Ringgit Amid Foreign Fund Outflows 
RBA Minutes Signal Australia Central Bank Remains Ready to Raise Interest Rates if Inflation Persists 
Lithium Market Poised for Recovery Amid Supply Cuts and Rising Demand 
Buy the Dip: Gold Holds Strong at $3980, Targets $4150 
On Valuation terms: NZD remains overvalued, while milk powder prices have stayed depressed and inflation in New Zealand has surprised to the downside.
NZD TWI strength is a major concern, together with downside risks to global growth. But TWI strength is not solely yield driven. Growth matters too and lowers interest rates are stimulating growth. The Canadian dollar offers better value, and should continue to benefit from more stable crude oil prices and the US economic recovery.
Disinflation: New Zealand is suffering from disinflationary pressures, with reported CPI inflation well below the RBNZ’s 1-3% target range. It is also more exposed to China growth risks than Canada.
Chinese trade exposure: New Zealand has a very export-driven competitive economy with exports accounting for about 30% of GDP.
Most notably, China has been the major trade partner of Kiwis, China overtook the United States at the end of 2008 to become New Zealand's second-largest trading partner, with bilateral trade amounting to $12.7 billion in the year ended September 2011. Chinese demand for New Zealand commodity exports, especially dairy products, and logs, has risen rapidly in recent times and has been the major factor in the recent surge in New Zealand's commodity prices and terms of trade.
OCR and Short End: Kiwis interest rates are high in a global comparison, we expect the RBNZ to cut the OCR by 25bps a piece in August and February, taking the OCR to 1.75%. This is more than fully priced, but even so, we expect the short end to remain under downward pressure as the market explores the possibility of deeper OCR cuts.
Recommendation: Short NZD/CAD is a relative value trade with low correlation to global market trends.
