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RBNZ
The market seems to have taken the details of the (freshly resumed) publication of the RBNZ's forecasted OCR track as a hawkish development. OIS pricing was indicative of a first OCR hike around Aug '22, but the track presented by the Bank points to 6bp of hikes being baked into the central scenario come the end of Q222 (equivalent to a ~24% chance of a hike by then if we run a simple division calculation, which may be over-simplistic). Note that the track is flat through the end of Q122.
- The minutes of the meeting revealed that "the Committee noted that on current projections the OCR eventually increases over the medium term, but agreed that this is conditional on the economic outlook evolving broadly as anticipated. In line with their least regrets framework, members reinforced their preference to maintain the current level of monetary stimulus until they were confident that the inflation and employment objectives would be met. They agreed this would require considerable time and patience."
Fig.1: RBNZ May '21 MPS OCR Track (%)
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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