ANZ: Kiwi Struggling, Flag Upside Risks For Upcoming RBNZ Meeting

ANZ write “the Kiwi is back in the low-$0.62s as we get underway today, having struggled as risk appetite wanes, U.S. bond yields retrace higher and PMIs surprise to the topside in the U.S. and Eurozone. But today is all about the RBNZ. We expect a 50bp hike, and given the inflation risks posed by Gabrielle, it’d be a surprise to see their OCR projections fall. Greater uncertainty and a sense of resilience to higher rates locally and globally also potentially poses upside risks to the terminal OCR. We think that’ll ultimately be NZD-positive, as will the rebuilding better vibe, which all lies ahead.”