Despite the intervention by the central bank of New
Zealand, carry trades as a basket are basically unchanged for the day. US
stocks were also flat while bonds yields resumed their rise. The
annualized pace of GDP growth in the first quarter was slightly stronger than
expected, but the deflator was weaker. Even though all eyes are still on
New Zealand, Japan could be the story of the night. CGPI, which is an
inflationary indicator and consumer confidence are due for release.
Stronger inflation is needed for the Bank of Japan to raise interest
rates. If inflation continues to remain weak, then rates will continue to
remain low, providing a supportive environment for carry trades.
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