FXstreet.com (Barcelona) - While the Greek cataclysm has drawn the international focus of investors, the RBNZ’s OCR Review on Thursday looks to dominate the local calendar in New Zealand. According to the Analyst Robert Rennie at Westpac, “We expect a dovish statement, emphasizing the low level of inflation, specifically around the bottom of the 1%-3% target band as well as the elevated NZD exchange rate.”
Term premia in the core markets continue to collapse, as the risk of an extremely negative outcome for the Eurozone has escalated once again and concerns endure about the health of the US and Chinese economies. Long-term yields are testing new depths and the line of least resistance is for further declines.
In New Zealand, the 2yr swap yield should continue to drift lower if the RBNZ adopts a more dovish tone at its OCR Review. “The long-term flattening trend remains intact and should extend through both the RBNZ’s on hold phase and ultimately into the next tightening cycle.” adds Rennie.
Term premia in the core markets continue to collapse, as the risk of an extremely negative outcome for the Eurozone has escalated once again and concerns endure about the health of the US and Chinese economies. Long-term yields are testing new depths and the line of least resistance is for further declines.
In New Zealand, the 2yr swap yield should continue to drift lower if the RBNZ adopts a more dovish tone at its OCR Review. “The long-term flattening trend remains intact and should extend through both the RBNZ’s on hold phase and ultimately into the next tightening cycle.” adds Rennie.
