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J.P.Morgan Pay May ’24 RBA OIS vs Receiving April ’24 RBNZ OIS

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J.P.Morgan write “Fed news this week was hawkish relative to pricing, but also seemed to confirm that cuts are likely this year. That suggests not overreacting to marginal information, and missing the bigger picture that a global easing cycle is approaching.”

  • “In that context the playbook for NZD rates appears more directionally straightforward than AUD, given its higher beta to US, and worse economic outlook.”
  • “Recent data alongside (on our expectations) a benign CPI next week should add to the case for an RBNZ narrative change.”
  • “RBNZ chief economist Conway will be delivering a speech in late January, including remarks on data delivered since the November MPS. We expect this is intended to smooth the lumpiness of what will likely be significant macro forecast changes in the February MPS.”
  • “While it remains to be seen how far the RBNZ’s narrative can shift by February, the relative pricing vs RBA seems wrong: Pay May 2024 RBA OIS vs receiving April 2024 RBNZ OIS.”
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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