RBA monetary policy decision on Tuesday, RBNZ on Wednesday - what to expect

Author: Eamonn Sheridan | Category: Central Banks

I found this interesting from ASB, a snippet from their their preview of the central banks this week.

  • Wednesday's OCR announcement by the RBNZ is delicately poised. We expect the RBNZ to cut the OCR twice this year, with a cut at this week's announcement and a second one in August. But we see the probability of a cut this week as only marginally above 50%. Market pricing is similarly poised. As at the time of writing, markets have nearly priced in a 60% chance of a cut on Wednesday. Notably though, the market has priced in a full cut by August. 
  • …  the RBA decision is also going to be close-run thing. There, markets have priced in a 40% probability of a cut tomorrow. Meanwhile, in contrast to our NZ OCR view, we expect the RBA will remain on hold this year.
I bolded that bit  - a very strong against consensus call from ASB indeed. 

I'll have more to come on both the RBNZ and RBA this week.


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