RBNZ: Market pricing 80% chance of OCR cut in November - Westpac

Imre Speizer, Research Analyst at Westpac, suggests that the market pricing for a 25bp OCR cut to 1.75% by 10 November continues to imply an 80% chance, unchanged from a week ago.

Key Quotes

“September remains only a 20% chance given the RBNZ has communicated that it prefers to move on MPS dates. Our view is that a Nov cut is highly likely, and there is a chance of a further move early in 2017 if the data warrants it.

Fed Chair Yellen’s eagerly awaited speech on Friday did stir markets on the day, pushing yields higher after VC Fischer added the message was consistent with hikes in either or both of Sep and Dec, but there was much conditionality added. According yields have retraced as we write, and market confusion remains. The FOMC wants to raise rates, that is certain; but the case has not (yet) been made. And it is clear that a great deal of uncertainty still clouds the outlook.”