RBNZ: No-cut decision with easing bias likely - BNZ

Jason Wong, Currency Strategist at BNZ, suggests that with the Fed out of the picture in June and the stronger NZD, the risk of the RBNZ cutting rates tomorrow had increased.

Key Quotes

“The OIS market prices tomorrow’s meeting at a 37% chance of a 25bps cut. Most see the rate decision as a close call, given recent misfiring communications from the RBNZ and a lack of confidence in what is driving the Bank’s decisions at the moment.

Certainly, the hawkish speech by the Governor in February, followed by the surprise rate cut in March and then the hawkish April OCR review means that anything is possible tomorrow. We err towards a no-cut decision and the Bank maintaining an easing bias.”