UOB Research discusses the RBNZ policy trajectory.
"The Reserve Bank of New Zealand (RBNZ) surprised markets in its July’s meeting by abruptly ending its bond purchase program as economic conditions were “persistently stronger than anticipated.” This has gotten markets guessing that a rate hike would soon be next. Indeed, the overnight index swaps have priced in a full 25 bps Official Cash Rate (OCR) hike by the October meeting," UOB notes.
"If this expectation turns into reality, the RBNZ will be the first G-10 central bank to hike rates and is likely to add to the resiliency of the NZD against the emerging USD. For now, our macro team is holding off a review of the OCR forecasts until the jobs report due 4-Aug to determine the odds of an imminent move by the RBNZ. As such, we will maintain status quo for our NZD/USD forecasts which are at 0.70 for both 3Q and 4Q21," UOB adds.