It’s the RBNZ’s turn to step up to the plate this week – and the markets are very keen to find out whether the bank can deliver on expectations.
After a very solid Q1 GDP and an upbeat business survey, markets have brought forward their expectations for a rate hike by the RBNZ to November this year. That means, at current pricing, markets see the bank hiking rates four months from now.
Even though we agree that the fundamentals are solid right now, the market might be a bit too aggressive in their projections and could see the RBNZ disappoint.
However, as the NZD has been under-priced in the past couple of weeks, a hawkish confirmation from the RBNZ could be just what the doctor ordered to see the NZD push higher.
We’ll go through all of that in this week’s video.