Free Trial

Rising Inflation Expectations Support Kiwi


Kiwi catches light bid after the release of the RBNZ's Q4 Survey of Expectations, which showed a further jump in anticipated inflation. The most closely watched gauge of 2-year inflation expectations rose to +2.96% from +2.27%, reaching a fresh 10-year high.

  • As flagged earlier, the survey comes out just a few days before the next RBNZ monetary policy meeting, with policymakers widely expected to hike the OCR in response to mounting inflationary pressures.
  • Market pricing of RBNZ interest-rate action next week has been more or less unchanged after the release, with the OIS strip still pricing ~35bp worth of tightening. That being said, there has been some hawkish repricing further out the curve, which implies a steeper tightening path.
  • NZD/USD sits +14 pips at $0.7012, familiar technical levels remain in play.
  • AUD/NZD has shed 32 pips as the Aussie sits at the bottom of the G10 pile. The rate last trades at NZ$1.0351, with bears setting their sights on Nov 9 low of NZ$1.0331.

To read the full story



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.