NZ: All about the RBNZ this week - Westpac

Imre Speizer, Research Analyst at Westpac, suggests that the NZ’s data calendar this week is all about the RBNZ and he expects the MPS on Thursday to deliver a 25bp cut to 2.0% and maintain an easing bias (we see almost zero chance it holds).

Key Quotes

“This outcome is fully priced but there is potential for a surprise and thus market reaction: a neutral bias would boost the NZD, while a signal of a prolonged easing cycle (a stronger chance, in our view) would do the opposite. Data releases (electronic spending, REINZ housing, manufacturing PMI) should have little impact.

Bias:

• NZD/USD looks neutral for the week ahead around 0.7150-0.7200. The RBNZ on Thu is more likely to cause a NZD fall than a rise, but the immediate US dollar outlook is weak (setting aside the fickle US payrolls data on Fri).

• Beyond next week, attractive NZD carry should continue to attract buyers such that 0.7250 is vulnerable, beyond that 0.7325 (the July peak).”