The RBNZ hiked its cash rate by 25bps to 2.5% as most within consensus expected and as mostly priced in OIS going into the decision.
Perhaps less expected was forward guidance that explicitly pointed to how “some further reduction in monetary stimulus is likely to e required” from what the central bank argued to be an accommodative stance. The RBNZ will refresh explicit forward rate guidance in its projections at the next meeting.
The NZ$ is among the class leaders relative to the USD this morning. The kiwi curve cheapened by 5–9bps in bear steepener fashion overnight. OIS is pricing two-thirds of another hike at the next meeting on September 2nd by which point an awful lot of new developments can unfold. Almost three more 25bps hikes are now priced by mid-2027.