Economics
New Zealand Shows How Quickly Delta Can Upend Rate-Hike Bets
- Expectations for rate increase Wednesday fall on positive case
- Timing ‘impossibly difficult’ for kiwi bulls: Saxo Bank
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It took just one case of Covid-19 for the New Zealand government to impose a nationwide lockdown -- and for traders to suddenly question a rate hike that was previously seen as a done deal.
Investors now see a 60% chance that the Reserve Bank of New Zealand will raise rates later on Wednesday, compared with more than 100% earlier this week, swaps data show. The shift followed the country reporting its first community case of Covid since February, prompting Prime Minister Jacinda Ardern to announce a three-day lockdown. A further four cases were confirmed early Wednesday, all believed to be the highly infectious delta strain.