 New Zealand Dollar softened mildly today as Q4 inflation data reinforced the case for continued monetary easing by RBNZ. The central bank has ample room to swiftly bring interest rate from the current 4.25% to neutral, with inflation staying at around mid-point of 1-3% target range for the second straight quarter. Another 50bps rate cut on February 19 should be solidified. However, beyond this, the scale further rate reductions by RBNZ will depend heavily on domestic disinflationary progress, especially in non-tradeable prices, as the effects of falling tradeable prices fade. Elsewhere, Dollar's pull back this week have slowed, but it has yet to stage a convincing recovery. President Donald Trump’s ongoing rhetoric on tariffs continued to draw attention but had little immediate impact on markets. Trump reiterated yesterday his intention to impose a 10% tariff on China, accusing it of enabling fentanyl shipments through Canada and Mexico to the US. He also repeated his threat to target EU with tariffs, calling it the “only way” to achieve trade "fairness". Markets, however, appeared unfazed, awaiting concrete actions to back Trump’s statements. Key dates for tariff announcements include February 1, when decisions on 25% tariffs for Canada and Mexico and 10% tariffs on China are expected. For other countries, tariff measures may be delayed until federal trade reviews conclude on April 1. With no immediate actions, Trump’s remarks seem more rhetorical than actionable.... | 
