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Annette Beacher, chief Asia-Pacific macro strategist at TD Securities, suggests that for the RBNZ, the central banks of its major trading partners Australia, China and the United States have all softened their rhetoric (links above) to the point where markets are pricing in the next move is down or at the very least, expect additional stimulus in the coming months.

Key Quotes

“We expect the RBNZ to out-dove the RBA and emphasise “downside risks” on Wednesday. The RBNZ under Governor Adrian Orr already had a “next move could be up or down” bias, so there is a low bar to demonstrate an even more dovish tone.”

“Orr can remind the markets that most core measures of inflation remain below 2% and wage growth remains sluggish despite reports that labour (skilled and unskilled) is hard to find.”