Free Trial
USDCAD TECHS

Impulsive Rally Extends

US TSYS

Late Eurodollar/SOFR/Treasury Option Roundup

EURJPY TECHS

Price Is Below The 50-Day EMA

US

Late Corporate Credit Update

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access

VIEW: Goldman Now Expect 50bp Hike In October And 3.75% Terminal Rate

RBNZ

Goldman Sachs note that the RBNZ’s “forward guidance was to the hawkish side of our expectations, driven by the “incredibly tight labour market” and related stronger wages growth lifting the outlook for non-tradables inflation - notwithstanding weaker outlook for GDP growth (four consecutive quarterly contractions in private consumption to Q323), commodity prices, and house prices (peak-to-trough: ~20%).”

  • “In contrast to some peer central banks, today’s MPS suggests the RBNZ is on a largely pre-set path for the OCR over the nearer term, has a high tolerance for a domestic slowdown, and is putting less emphasis on global risk. In view of this, we now expect the RBNZ to hike rates by +50bp in October (prior: +25bp). A further +50bp hike at November’s meeting is possible, but we expect the RBNZ to ease the pace of tightening to +25bp at that point (to a 3.75% terminal rate) - on clearer evidence of decelerating domestic/global inflation, large falls in house prices, and a step-down in the pace of monetary tightening globally.”
169 words

To read the full story

Why Subscribe to

MarketNews.com

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.

Goldman Sachs note that the RBNZ’s “forward guidance was to the hawkish side of our expectations, driven by the “incredibly tight labour market” and related stronger wages growth lifting the outlook for non-tradables inflation - notwithstanding weaker outlook for GDP growth (four consecutive quarterly contractions in private consumption to Q323), commodity prices, and house prices (peak-to-trough: ~20%).”

  • “In contrast to some peer central banks, today’s MPS suggests the RBNZ is on a largely pre-set path for the OCR over the nearer term, has a high tolerance for a domestic slowdown, and is putting less emphasis on global risk. In view of this, we now expect the RBNZ to hike rates by +50bp in October (prior: +25bp). A further +50bp hike at November’s meeting is possible, but we expect the RBNZ to ease the pace of tightening to +25bp at that point (to a 3.75% terminal rate) - on clearer evidence of decelerating domestic/global inflation, large falls in house prices, and a step-down in the pace of monetary tightening globally.”