By Kimberly Martin
It was a fairly quiet day across NZ markets. Swap yields closed down around 1bps across the curve.
Heading into this Thursday’s RBNZ meeting the market is pricing almost a 100% probability of a 25bps rate hike.
It also sees the OCR being 200 bps higher in around two years’ time. We forecast 250bps of hikes by this time.
NZ 2 and 5-year swap sit at 3.94% and 4.58% respectively with the 2-10s swap curve at 116bps.
Overnight, in the absence of data flow, and with the standoff in Ukraine no longer dominating news flow, US benchmark yields consolidated around recent levels. US 10-year yields traded between 2.76% and 2.80%.
Today, NZ crown accounts and electronic card transactions will be released.
Across the Tasman the release of the NAB business survey for February has the potential to impact on expectations for RBA activity. The market currently prices less than a 10% chance of a further rate cut from the RBA in the months ahead.
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