RBNZ: Little chance of rate hike until 2019 - Westpac

Analysts at Westpac note that NZ markets continue to assign little chance of an RBNZ rate hike until 2019, with May 2019 fully priced but Nov 2018 under 50%.

Key Quotes

“That is keeping the short end well and truly anchored, with little on the NZ event calendar this week to disturb that caution.”

“One result of an RBNZ-anchored short end is that short end NZGBs are seeing greater demand than long end NZGBs. While the difference is historically pronounced, it could become even more so. As NZ-US yield spreads have declined, the sensitivity of NZ rates to US rates has increased.”