<p>TD expect a +50bp rate hike from the Reserve Bank of New Zealand this week.</p><ul><li>The consensus is for +50 also. </li></ul><p>The decision is due at 0100 GMT on Wednesday 22 February 2023:</p><ul><li>2pm local time in NZ</li><li>8pm US Eastern time on Tuesday 21 February. </li></ul><p>RBNZ Governor Orr will follow up with his press conference an hour later. </p><p>Preview snippet via TD:</p><ul><li>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. </li><li>New economic projections will accompany the Board's decision with most focus on whether the Bank retains a 5.5% OCR peak by May.</li></ul><p>NZD implications:</p><p>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. </p><p>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.</p><p>(GMPCA is TD's own model)</p><p>—</p><p>Earlier:</p><ul><li><a href="https://www.forexlive.com/centralbank/kiwibank-says-the-rbnz-should-pause-its-rate-hikes-citing-national-state-of-emergency-20230216/" target="_blank" rel="follow" data-article-link="true">KiwiBank says the RBNZ should pause its rate hikes, citing national state of emergency</a></li></ul>
This article was written by Eamonn Sheridan at www.forexlive.com.
