RBNZ update has potential to nudge the market toward fully pricing an August cut - BNZ

Kymberly Martin, Senior Market Strategist at BNZ, suggests that Thursday’s RBNZ update on the economy has potential to nudge the market toward fully pricing an August cut.

Key Quotes

“However, we believe the market will remain reticent to price an OCR that is much below 1.75% (currently a 1.80% trough in the OCR is priced). The RBNZ’s concerns for financial stability, emanating from the bubbling housing market, should prevent the market pricing aggressive cuts. We therefore see NZ 2-year swap likely to find support below 2.1%. Broadly we still see a 2.1- 2.4% range.”