The Reserve Bank of New Zealand announcement is due Thursday (10 December) morning local time (Wednesday 9 December 2015 , 2000GMT)

  • RBNZ Governor Wheeler then speaks at a press conference at 2005GMT
  • 4 hours later Wheeler heads on over to parliament (at 0010GMT) to front a committee

Barclays with their preview of what to expect from the RBNZ:

  • Narrowly expected to cut rates (for the fourth time this year(, from the current 2.75% to 2.5%
  • This would fully reverse last year's rate hikes
  • We expect a cut given a weaker outlook and with average underlying inflation remaining below the RBNZ's target
  • Risk to this call - "the RBNZ might want to extend its pause to gather more information on the economy, particularly when one of its key underlying inflation measures is tentatively picking up for the first time in several years"

For the updated RBNZ outlook:

  • Think the forecast profile will build in a further cut next year
  • As well as a weaker exchange rate

For the NZD:

  • We recommend being short NZDUSD going into the meeting, considering that a rate cut is not fully priced
  • Trade for the week ... "We recommend being short NZDUSD going into the RBNZ meeting. The market is only pricing a 40% probability of a 25bp rate cut. If the RBNZ does cut and signals willingness to counter NZD strength, the NZDUSD is likely to sell off."