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May 24 - 02:55 PM

NZD: An RBNZ 50bp Hike Itself Is Unlikely To Boost The NZD - Barclays

By eFXdata  —  May 24 - 01:30 PM

Barclays Research discusses NZD outlook around tonight's RBNZ policy meeting.

"The RBNZ meeting (Wed) with Monetary Policy Statement is the main focus of the week, where we and market both expect another 50bp hike amid continued capacity constraints as seen in the labor market and Q1 inflation reaching close to +7.0% and their least-regrets framework of “more now, rather than later,” Barclays notes.

"A 50bp hike itself is unlikely to boost the NZD much as it is almost fully priced in OIS markets already, which would put the focus on their new forecast and guidance on the pace of subsequent rate hikes. May RBNZ OIS is pricing a 48bp hike, but we saw some revision in terminal rate expectations (1y ahead RBNZ OIS at 3.67%) with 10y NZGB yields tracking the move lower in UST yields," Barclays adds. 

Source:
Barclays Research/Market Commentary

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