Credit Agricole CIB Research discusses its expectations for tonight's RBNZ policy meeting, which is scheduled for 0300 GMT
"The RBNZ is widely expected to raise its OCR by 50bp to 3% on Wednesday, which would take monetary policy into restrictive territory. The focus for the market will be the central bank’s MPS and its projections for the peak in the OCR, where the RBNZ could signal a lower and earlier peak than it forecast back in May," CACIB notes.
"In May, the RBNZ forecast a peak in the OCR of 3.75-4% running from Q2 2023 to Q2 2024. The rates market has similarly priced in a peak in the OCR a little above 4%. The downside risk for the NZD is that the RBNZ forecasts a lower peak in the OCR of around 3.5-3.75%, which will come later this year following two 25bp rate hikes and last for a shorter period than the year forecast by the central bank back in May," CACIB adds.
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