VIEW: ASB Still Favour 25bp Hiking Increments, But Nov/Feb May See 50bp

ASB note that they "expect the RBNZ to deliver a second successive 25bp lift in the OCR next week. To our minds, both the November and February meetings are 'live' chances for larger 50bp hikes, the former particularly so after today's strong inflation expectations print. But we continue to favour 25bp increments for now largely because the market is already doing significant tightening work for the RBNZ. The Bank will want to ensure this remains the case given the long gap to the 24 February meeting, so expect a hawkish Statement with upgrades to the Bank's inflation and OCR forecasts. On the latter, we expect the hikes projected in the August MPS to be front-loaded with the overall OCR track lifted to show a peak on the tighter side of 'neutral'. Perhaps something around 2.5%."