The Reserve Bank of New Zealand meet on November 24.
- Monetary Policy Statement is due at 0100 GMT
- and the Media Conference will follow
Snippets from ANZ’s (much more detailed) preview:
- Given the large upside surprises to inflation and employment since the October Review, it’s no surprise that the main question for markets has been how much the RBNZ will hike, rather than will they/won’t they.
- Market pricing implies 60/40 odds of a 25bp hike versus 50bps.
- One can certainly make a case for a 50bp hike, but for us, the argument for 25bps is stronger. The inflation risks are still to the upside, but growth and employment risks are much less one-sided. Monetary conditions have already tightened quite a bit, with mortgage rates rising at the fastest rate in 15 years. A 25bp hike will help to lock in that tightening, without putting undue stress on the economy.
Bolding is mine. Its still COVID-19 uncertainties that are tipping expectations towards 25bps instead of 50bps. Indeed, (soon to be ) RBNZ Deputy Governor Hawkesby said in October the RBNZ would be hiking rates by 25bps, not 50bps, at meetings due to the heightened uncertainty.
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