I posted JPMorgan’s view of more rate hikes to come from the Reserve Bank of New Zealand this year, here
Note I updated that post a little later with BNZ’s view for the RBNZ … which is pretty muc opposite to JPMs. (H/t to Mungo for pointing it out to me)
More now from BNZ, in a note dated 8 January. In brief (bolding mine):
Talk of the NZD/AUD trading at parity will be reinvigorated
- We believe this is unlikely
- Much of the diverging prospects on either side of the Tasman appear to already be in the price
- The market already prices almost 50bps of cuts from the RBA (aligned with our NAB colleagues’ view) while the RBNZ is seen to be ‘on hold’
- Equally, the prospect for some rebound in NZ dairy prices appears to be factored in, while a soft outlook for AU commodity prices appears expected
- As it stands today our fundamental model for the NZD/AUD suggests a ‘fair value’ in the range of 0.9000-0.9200. This is not to suggest we expect immediate correction to these levels. Rather it serves to warn against extrapolating current momentum to a further push in the currency beyond relative fundamentals
