One for the New Zealand dollar traders, a change in forecast from HSBC on the Reserve Bank of New Zealand

The note, in summary (bolding mine for emphasis):

  • Despite continued robust economic growth, inflation disappointed in Q2 and wages growth remains subdued
  • Given limited inflationary pressures and a dovish central bank, we now expect the RBNZ to lift its cash rate in Q3 2018 (previously Q1 2018)
  • FI/FX strategy: The NZD has rallied too far and too fast, looking misaligned with rates, which we still expect to stay low

The HSBC note is dated 3 August 2017