TD expect a +50bp rate hike from the Reserve Bank of New Zealand this week.
- The consensus is for +50 also.
The decision is due at 0100 GMT on Wednesday 22 February 2023:
- 2pm local time in NZ
- 8pm US Eastern time on Tuesday 21 February.
RBNZ Governor Orr will follow up with his press conference an hour later.
Preview snippet via TD:
- After a historic 75bps hike at the November meeting, the subsequent inflation and labour market outcomes undershooting RBNZ forecasts support a return to RBNZ hiking in 50bps clips. The downshift would also be consistent with global central banks stepping down the pace of hikes.
- New economic projections will accompany the Board's decision with most focus on whether the Bank retains a 5.5% OCR peak by May.
NZD implications:
We don't think the RBNZ will do many favors for NZD at its February meeting, especially as market pricing looks a bit aggressive. The recent correction of the China reflation theme has also weighed on regional assets, including NZD.
note the big pricing discount in NZDJPY, where GMPCA prices the cross at 89.78, implying a tactical opportunity to lean into an RBNZ- inspired dip.
(GMPCA is TD's own model)
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Earlier:
