RBNZ Dated OIS Softens After Less Hawkish RBNZ
Following the RBNZ’s hint yesterday that they may opt to maintain a tight monetary policy for an extended period instead of pursuing further tightening, RBNZ-dated OIS rates have softened. They are now 5-9bps softer from pre-decision levels across meetings extending to August 2024.
- Only a 17% chance of a 25bp hike had been priced for Wednesday’s policy meeting.
- In line with the softening across meetings, terminal OCR expectations have softened 9bps from pre-RBNZ decision levels.
- At 5.76%, the market still has a 25bp hike priced by April 2024. Prior to the RBNZ decision, a 25bp hike had been fully priced by February 2024.
Figure 3: RBNZ Dated OIS Terminal Rate Pricing (%)
Source: MNI – Market News / Bloomberg