Some Sell Side Views Post RBNZ

Some sell-side views NZD and AUD/NZD post the RBNZ outcome: Mixed outlooks for NZD.

• Deutsche Bank: "Positioning indicators “point to a decent build in NZD longs in the past month or so” as some market participants used the currency to express hawkish RBNZ views. There’s an “unwind to come,”. NZ’s economy is also in bad shape with a large decline in retail volumes in the fourth quarter despite 3% population growth. “Poor growth will provide plenty of disinflation” “If NZD loses its carry advantage, what’s left? A huge current-account deficit” (per BBG). DB sees risks of NZD/USD falling to 0.5900.
• Macquarie: “A decent fall in NZD/USD, but I’d expect very limited follow-through,” says Gareth Berry, Singapore-based FX and rates strategist at Macquarie. “The RBNZ is still signaling no rate cut until mid-2025, about a year after the Fed starts cutting, and six months after the RBA too”
• Still, it’s hard to see a sharp move in either direction after AUD/NZD goes back to 1.07 levels until either the RBA or RBNZ gives concrete guidance that rate cuts are just a few months away" (per Bloomberg).
• CBA: "While the statement was less hawkish than expected, the RBNZ signals interest-rate cuts are a long way away”. “The RBNZ is likely to be the last to join the rate-cut party, so that will keep NZD relatively supported” (per Bloomberg).