Kiwi Sinks After RBNZ Policy Review

The upswing in NZD/USD after the RBNZ announced a 50bp hike to the OCR was short-liver and the rate pulled back sharply later on Wednesday. While the magnitude of the rate rise topped consensus forecast, the market was pricing a ~75% chance of an outsized move, while the RBNZ's communique suggested that the central bank merely front-loaded policy tightening without necessarily looking to bring the OCR to a higher terminal level. The kiwi dollar was the worst performer in G10 FX space, while NZD/USD had a bullish outside day.

• The rate trades flat at $0.6797 at typing, with bears looking for renewed losses past Mar 15 low of $0.6729. On the flip side, a rebound above yesterday's high of $0.6902 would bring Apr 5 high of $0.7034 into play.
• The latest REINZ report showed continued cooling in the housing market, as "pressure on property prices eases, inventory levels increase, demand softens and sales activity decelerates." While the median property price rose 0.6% M/M in March, the seasonally adjusted figure showed a 4.8% decline. In addition, the number of sales was lowest for the month of March (traditionally the busiest month of the year for property sales) in a decade.
• New Zealand's BusinessNZ M'fing PMI will be published at the bottom of the hour. Reminder that the nation will observe Easter holidays from tomorrow.