RBNZ presser at 22hrs GMT: what to expect now - Kiwi to drop on more dovishness?

In today's busy schedule for the RBNZ, markets will enjoy the presser that will follow the RBNZ's interest rate announcements due at the top of the hour, 21.00. The presser is due at 22.00GMT. 

There will special interest at this event due to the RBNZ not only discussing the bank's decision on interest rates for this month, but we also have the release of the quarterly monetary policy statement.  Markets are expecting the RBNZ to recognise the improvements in the economy, dairy prices and how the economy is on track to meeting the RBNZ's 2% inflation target. 

• RBNZ keeps interest rates on hold at 1.75%

“All things considered," explained Robin Winkler, Strategist at Deutsche Bank, "we expect the first OCR hike in the first quarter of 2018 but see the risk increasingly skewed toward a hike as early as November. Given the improved outlook, the RBNZ today could pencil in the start of the tightening cycle for late 2018, rather than mid-2019, which would likely come as a surprise to many."

The markets were wrong-footed leading into what was expected to be a hawkish outcome. The bird dropped an initial 5 pips, then a hard 40 pips on the announcements before a total loss of 120 pips on the 30 min sticks. NZD has made a fresh low of 0.6821. Should the presser continue with a dovish theme, then the bird could drop out of its 0.68 handle perch and look to test lower on the 0.67 handle ahead of the key 0.6675 level as the 29th May 2016 high.

Key Notes:

NZD/USD: offered as RBNZ leaves rates on hold with a hint of dovishness in the statement

Forex today: market shrug off Comey news but remain cautious, dollar still firm, US yields breaking up

NZD: Rising RBNZ expectations - Nomura

RBNZ: Buy fresh kiwis – Deutsche Bank