RBNZ: Can There be a Surprise Cut in Rates? – TDS
Research Team at TDS, suggests that the RBNZ is caught flat-footed when compared with the RBA.
“The RBNZ on Thursday can easily deliver a 25bp rate cut and a fresh easing bias via “a higher exchange rate allows for a lower bank bill profile than previously expected”.
A pause this week may be expected by OIS and most local analysts, but it will surprise the global investor community: Governor Wheeler has never achieved his 2% inflation target, while the RBA missed its inflation target once and cut at the first opportunity.
Being a high yielder, the NZD will jump (AUDNZD retest the 1.049 lows?) if the RBNZ isn’t at least uber-dovish.”