‘Vibe coding’ is fun and easy, but there’s a major catch 
BOJ Minutes Signal More Rate Hikes as Inflation Risks Grow 
Japan PM Sanae Takaichi Unveils Growth Plan as BOJ Independence Concerns Lift Bond Yields 
Singapore Central Bank’s Exchange Rate Policy Explained: Why MAS Uses the S$NEER Instead of Interest Rates 
Japan Economy Minister Downplays Inflation Risks Despite BOJ Warning 
China Holds Loan Prime Rates Steady for 14th Month as Economic Recovery Remains Uneven 
RBA Signals More Rate Hikes Possible as Australia Battles Stubborn Inflation 
Chile Central Bank Holds Interest Rate at 4.5% as Inflation and Global Risks Persist 
RBI Holds Repo Rate at 5.25% as Inflation Risks and Global Uncertainty Persist 
Kiwi dollar has been gaining traction ahead of following data announcements.
NZD IVs have been bolstering above 12.8% owing to this week’s flurry of data streaks, GDT price index on Tuesday, RBNZ’s monetary policy that’s been scheduled for this Wednesday, and Chinese trade balance on Thursday.
Export prices: +40bp
World dairy prices rose sharply ahead of the November Monetary Policy Statement, and have risen modestly further since then. The RBNZ did not incorporate the rise in prices in its November forecasts but acknowledged that the longer those dairy prices remained at these levels, the more it would have to factor them into its forecasts.
The estimation assumes that the RBNZ would now approve a forecast similar to our own, which incorporates a modest pullback in prices this year. This one is particularly hard to quantify, as it rests on a judgment about existing information, rather than on new information.
Exchange rate: -20bp
The trade-weighted index is tracking around 4% above what the November MPS assumed for this quarter. About half of this can be justified by the modest rise in export commodity prices since November, but the other half would be considered a ‘portfolio effect’ that is not based on fundamentals.
While Kiwis trade deficit decreased 1.3 pct year-on-year to NZD 41 million in December of 2016. Exports declined 0.9 pct to NZD 4.4 billion, led by meat and edible offal (-16 pct) while milk powder, butter, and cheese raised 8 pct. Imports fell 0.9 pct to NZD 4.4 billion.
