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16 Nov 2015
NZD: December will be a close call for RBNZ – Westpac
FXStreet (Delhi) – Imre Speizer, Senior Markets Strategist at Westpac, notes that the markets slightly increased the chance that the RBNZ will ease by 25bp in December, to 44%, abut a full cut is not priced until with 100% priced not until March 2016.
Key Quotes
“We assess the chance of a December at around 60%. The main data to watch ahead of the RBNZ’s December interest rate decision will be the GDT dairy auctions. Further price declines will support a rate cut.”
“In addition, we’ll be keeping a close eye on the NZD. Earlier in the year, the RBNZ had been banking on a fall in the NZD to generate substantial boost in imported inflation. The September MPS forecast a fall in the TWI from 70.0 to 67.9. However, the TWI has strengthened since then to 73.7, and is currently at 71.3. As a result, tradeables inflation unlikely to rise on the manner the RBNZ’s expects.”
Key Quotes
“We assess the chance of a December at around 60%. The main data to watch ahead of the RBNZ’s December interest rate decision will be the GDT dairy auctions. Further price declines will support a rate cut.”
“In addition, we’ll be keeping a close eye on the NZD. Earlier in the year, the RBNZ had been banking on a fall in the NZD to generate substantial boost in imported inflation. The September MPS forecast a fall in the TWI from 70.0 to 67.9. However, the TWI has strengthened since then to 73.7, and is currently at 71.3. As a result, tradeables inflation unlikely to rise on the manner the RBNZ’s expects.”