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.”

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.

(Market News Provided by FXstreet)