TD Securities’ Global Strategy Team expects the Reserve Bank of New Zealand to leave the Official Cash Rate unchanged, in line with market consensus. The analysts think RBNZ communication will stress patience in responding to supply shocks while the economy runs below capacity. They see current market pricing of more than 75 bps of hikes in 2026 as excessive and will scrutinize Minutes for any hint of earlier tightening.

RBNZ expected to push back on hikes

"We and the market do not expect any change in the cash rate at this meeting."

"Like the Governor's speech last week, the Bank's communication is likely to reaffirm the Bank's reluctance to respond impulsively to the supply shock, especially when the economy is operating below capacity."

"This should challenge the market's pricing of more than 75bps of hikes this year."

"We will scan the Minutes for any signs the RBNZ may consider shifting its stance in favor of bringing forward hikes earlier."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)