Credit Agricole CIB Research discusses its expectations for tonight's RBNZ policy meeting.
"We expect the RBNZ to continue with its philosophy of the path of least regret and to hike its OCR another 50bp to 2.50% in order to continue front loading rate hikes and avoid having to raise rates more later on. But, with the market nearly fully priced for this hike, the main focus will be the RBNZ’s MPS and whether or not it begins to lower its OCR projections to take into account rapidly slowing growth as well as lower oil prices. Back in May, the RBNZ had a peak in its OCR of 3.9% by mid-2023," CACIB notes.
"So, the risk for the NZD around the meeting is a lowering of the peak in the OCR, as NZD/USD hit fresh two-year lows sub-0.61 yesterday," CACIB adds.
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