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Aug 17 - 10:55 AM

NZD: No Sign Of RBNZ Peak Hawkishness; 2 Key Factors For NZD In The Next 24 Hours - Credit Agricole

By eFXdata  —  Aug 17 - 09:30 AM

Credit Agricole CIB Research discusses its reaction to this week's RBNZ policy decision. 

"The RBNZ raised its OCR by 50bp to 3% as widely expected, but what surprised the market and us was its ramping up of its hawkish rhetoric and the increase in the central bank’s forecast peak in the OCR. Relative to its May MPS, the RBNZ increased the peak in the OCR by 20bp to 4.1% (to between 4-4.25%) and brought forward this peak by 3 months to Q2 2023," CACIB notes.

"The two key factors for the NZD in the coming twenty-four hours will be the NZ government bond curve as deepening inversions post hawkish RBNZ meetings have held the NZD back in the past. The 2s10s spread has inverted by a few more basis points post today’s meeting. And, whether or not other central banks, especially the Fed, also remain hawkish. The RBNZ has been a leading indicator for other G10 central banks so far this cycle. The FOMC Minutes later today will be important on this front," RBNZ adds.

Source:
Crédit Agricole Research/Market Commentary

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