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STIR
RBNZ dated OIS pricing is slightly softer across meetings ahead of today’s RBNZ Policy Decision.
- We expect it to leave rates again at 5.5% where they have been since May last year. The RBNZ is firmly on hold and there appears to be a high bar for it to shift rates in either direction for now. Bloomberg consensus is also unanimous in expecting the OCR to be left unchanged. (See MNI Preview here)
- The April meeting will not include a forecast update or a press conference. We expect the statement to be in line with February’s softer tone with a moderate tightening bias retained.
- There's a 6% probability priced in for a 25bp hike at today’s meeting.
- The pricing level of 5.51% for the April meeting also represents the anticipated terminal OCR.
- By year-end, a cumulative 61bps of easing is factored into the pricing.
- To provide context, it's worth noting that in late December, the market had expected over 100bps of easing by year-end, stemming from an anticipated terminal OCR of 5.53%.
Figure 1: RBNZ Dated OIS Pricing (%)
Source: MNI – Market News / Bloomberg
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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