NZD

• Weaker USD. ECB delivered another hawkish hike. Policy divergence between the ECB & US Fed has boosted the EUR & weighed on the USD.• AUD stronger. Compounding the softer USD was another strong local labour market report & expectations China could announce stimulus to boost growth.• BoJ today. No changes expected. But tweaks appear inevitable. JPY is at quite low levels. We think there are more upside than downside risks from here. US and European markets diverged overnight, with contrasting central bank expectations a driver. European equities eased back (EuroStoxx50 -0.3%) and bond yields rose after the ECB delivered...

• BoC hike. The ‘surprise’ move by the BoC has rattled markets. Bond yields have risen as markets adjust interest rate expectations.• AUD softer. AUD has given back a little ground. The shift in offshore pricing counteracts the change in RBA thinking. Q1 GDP was also weak.• Central banks. The US Fed, ECB & BoJ meet next week. Inflation is a hard nut to crack. Further upward adjustment in rates could weigh on risk sentiment. Markets came back to life overnight. Expectations that central banks have more work to do to get on top of high services/core inflation are growing....