Halister News

(Bloomberg) -- An expected dovish RBNZ statement at tomorrow’s policy meeting may give an insight into the extent of the central bank’s concerns about the elevated kiwi dollar, according to Bloomberg strategist Michael G Wilson.

• Market pricing from N.Z. OIS currently shows 31.8% probability of a cut tomorrow, loosely in line with Credit Suisse’s index of same
• 15 of 17 economists in Bloomberg survey see RBNZ leaving rates unchanged tomorrow; decision due at 9:00am local time
• To deal with NZD’s appreciation since its last meeting, RBNZ may opt to:
  • Lower the 90-day rate profile
  • Allude to waiting for ECB and PBOC decisions before deciding to act, thus creating an air of immanency to their own decision which may help avoid relative tightening
  • Stress on deterioration in global growth and sentiment, recently underscored by China and Japanese data while toning down any focus on encouraging domestic data
• RBNZ may increase dovish slant by tweaking January’s statement from “further policy easing may be required” to mimic October’s comment that “some further reduction in the OCR seems likely”