RBNZ: Zero chance of a change in the OCR during the next four meetings - Westpac

Market pricing for the RBNZ has been fairly stable during the past week, continuing to price a zero chance of a change in the OCR during the next four meetings, but a 70% chance of a hike by Nov 2017 and almost100% by Feb 2018, notes Imre Speizer, Research Analyst at Westpac.

Key Quotes

“Our own macroeconomic forecasts have the RBNZ remaining on hold for the next two years but we understand the rationale for markets wanting to be well ahead of the game. If inflation and inflation expectation data keep unfolding in an upward direction during the months ahead, OIS pricing will only move further in that direction.”

“There is a large communication void between the Nov and Feb meetings, something yesterday’s upbeat speech by RBNZ Governor Wheeler attempted to fill. There will be another speech on 26 Jan in Christchurch.”