STIR: $-Bloc Markets Little Changed Since Start Of Week Apart From NZ

In the $-bloc, rate expectations through July 2025 remain mostly steady since the start of the week, with New Zealand as an exception, showing a 10bp increase. 

• Yesterday, the FOMC delivered the expected 25bp cut. The Fed has maintained a steady outlook on the economy and rate trajectory since September, emphasising that “nothing in the economic data suggests the committee needs to hurry” toward a neutral stance.
• Conversely, the RBA on Tuesday highlighted its commitment to returning inflation to target, stressing vigilance against upside risks. Although headline inflation has moderated, underlying inflation remains high, prompting the RBA to keep policy restrictive until inflation shows sustainable progress toward the target, with decisions based on evolving data and risks.
• In New Zealand, the key release was the Q3 Employment Report, revealing a softening labour market as the economy weakens. Employment fell 0.5% q/q, with annual growth down 0.4%. However, the unemployment rate rose less than expected due to a larger-than-anticipated drop in participation. Wage growth slowed as labour market pressures eased.
• Looking ahead to July 2025, the projected official rates and cumulative easing across the $-bloc are as follows: US (FOMC): 3.85%, -77bps; Canada (BoC): 2.83%, -92bps; Australia (RBA): 4.04%, -28bps; and New Zealand (RBNZ): 3.48%, -127bps.