RBNZ cuts rates 25 bps as expected, declares easing cycle

•     RBNZ cuts rates 25 bps as expected, declares easing cycle

–    Says “We expect further easing may be appropriate.” With rates still at 3.25%, they have plenty of room to cut further (unlike most other central banks)

–    NZD to remain weak as market adjusts expectations for monetary policy

•     Australian unemployment unexpectedly falls; AUD strengthens

–    Drop to 6.0% from 6.2% is surprising as most other indicators show weak economy

–    Market not expecting any more rate cuts; outlook should support AUD

•     US oil inventories plunge even as output rises

–    Oil price rises as market focusing on fall in inventories; but US output is at record high despite increase in OPEC production

–    I think oil price can fall as market rethinks outlook for production; CAD, NOK vulnerable

•     Greek court declares pension concessions unconstitutional

–    Will shore up govt’s conviction not to give in to creditors’ demands

–    Bild reports German govt has rejected a third aid package for Greece

–    Solution may be impossible before end-June deadline = EUR-negative

•     China statistics show...(figures due out @ 8:30 Cyprus time)

•     Today:

–    Eurozone: French CPI for May

–    Sweden:  CPI, CPIF for May:  further weak prices could keep SEK under pressure

–    US: Retail sales “advance” for May expected to rise to 1.2% mom from 0% = USD-positive; initial jobless claims expected to hold steady @275k.