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STIR: NZ-AU Official Rate Spread To Narrow -50bps By July 2025

STIR
BulletMarketsFixed Income Bullets

RBNZ-dated OIS pricing has softened by 1-3bps across 2025 meetings today, while Australian OIS pricing has remained steady. 

  • The New Zealand market is pricing in 53bps of easing for next Wednesday’s policy meeting, with a cumulative 93bps by February and 134bps by July.
  • In contrast, the Australian market does not fully price in a 25bp rate cut until August next year.
  • By July, New Zealand’s official cash rate is projected to be 52bps lower than Australia’s, despite currently sitting at 43bps higher.
  • For context, back in late October, the NZ-AU official rate differential was expected to reach -75bps. 

 

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RBNZ-dated OIS pricing has softened by 1-3bps across 2025 meetings today, while Australian OIS pricing has remained steady. 

  • The New Zealand market is pricing in 53bps of easing for next Wednesday’s policy meeting, with a cumulative 93bps by February and 134bps by July.
  • In contrast, the Australian market does not fully price in a 25bp rate cut until August next year.
  • By July, New Zealand’s official cash rate is projected to be 52bps lower than Australia’s, despite currently sitting at 43bps higher.
  • For context, back in late October, the NZ-AU official rate differential was expected to reach -75bps. 

 

Keep reading...Show less