This via the folks at eFX.
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- "We continue to maintain a bearish skew on NZD given challenges to the global growth and risk outlook and a slowing of local data. New Zealand house price appreciation continues to slow as macroprudential policy and RBNZ tightening restrict demand. Risks appear to be rising that the RBNZ may be 'overtightening', and its penchant to change course quickly suggests that rate cuts in 2023 may be rising even despite firming inflation," MS notes.
- "We continue to see 1s5s flatteners as appropriate given this risk, though we may consider shortening the tenor of our paid position if data soften further, raising the risk of earlier rate cuts to be priced in by the market," MS adds.
