ANZ: OCR Hiking Path Likely To Help NZD

ANZ note that "NZD/USD has recovered from yesterday afternoon's dip, and is starting the day around $0.7090. Price action in the last 24hrs has been volatile - it bounced fairly aggressively after yesterday's bumper inflation print, then lost ground as the USD strengthened, before bouncing again. Given some of the themes ripping through global markets like stagflation, tapering and spiraling energy prices, more volatility is likely. But the rise in inflation will keep the RBNZ at the beginning of the pack this hiking cycle, which should cement rather than question its commitment to low and stable inflation, and growing market expectations of more OCR hikes will likely help rather than hinder the NZD. There is no talk of letting inflation run, and temporarily high inflation shouldn't weigh on the NZD."