RBNZ: Market split between no change and a 25bp rate cut – RBC CM

Adam Cole, Research Analyst at RBC Capital Markets, suggests that the RBNZ announces its cash rate decision at 22:00 tonight and the market is split between no change and a 25bp rate cut.

Key Quotes

“OIS is priced for a 50% risk of a cut. Our economists are in the minority (seven of 17 in Bloomberg’s survey) that expect a cut. A persistent undershoot of the inflation target, stronger TWI, and lacklustre dairy prices argue for further easing, although a number of local banks that did expect a near-term cut have pushed their expectation to the August or September meetings.”