NZGBS: Little Changed, Few Surprises From RBNZ Policy Decision

NZGBs little changed after the RBNZ leaves the OCR at 5.50%, as widely expected. The RBNZ noted that the economy had evolved broadly as anticipated, and that the restrictive policy stance remains necessary to ensure annual consumer price inflation returns to the 1 to 3 percent target range. The statement also noted that most central banks are cautious about easing monetary policy.

• "Overall, members agreed that the balance of risks was little changed since the February Statement. Ongoing restrictive monetary policy settings are necessary to reduce inflation, while avoiding unnecessary instability in output, employment, interest rates and the exchange rate.”
• Cash NZGBs are 4-5bps richer on the day.
• Swap rates are 4-5bps lower, with the 2s10s curve slightly flatter.
• RBNZ dated OIS pricing is unchanged so far after the decision, with 61bps of cumulative easing priced for year-end.