New Zealand Bond Markets Could Face an October RBNZ Surprise
- Traders price in 25 basis point rise each in next two meetings
- They ascribe 4% probability to 50 basis-point hike in October
This article is for subscribers only.
New Zealand interest rate markets are expecting the nation’s central bank meeting to do next month what it didn’t in August -- hike rates by 25 basis points. In fact, an even larger increase could be on the cards.
A hawkish sounding Reserve Bank of New Zealand as well as Prime Minister Ardern’s decision to lift a national lockdown outside largest city Auckland have already buoyed the nation’s yields. The 10-year tenor rose above 2% last week to touch its highest level since April 2019. To top that off, data due this week should show a booming economy ahead of the lockdown, with second-quarter gross domestic product data slated to rise 16.1% year-over-year.