RBNZ: Market expectations for the first hike have been pushed back - ANZ

The pace of the decline of NZ’s short-end rates has slowed in recent days and market expectations for the first RBNZ hike have been pushed back from around May to around August 2018, notes the analysis team at ANZ.

Key Quotes

“That seems reasonably fair given our forecast of a May hike with the risk profile around that tilted towards later, rather than sooner. However, with carry making it expensive to be short and attractive to be long, and the NZD holding up, we do see scope for the 2 year to move lower still. But any moves will be gradual. Compared to what might happen at the long end, there’s little to get excited about.”