NZD: Still pricing in an RBNZ uncertainty premium - ING

Analysts at ING point out that acting RBNZ Governor Spencer will testify to the New Zealand parliament (Wed) this week, though discussions may be more related the Financial Stability Report.

Key Quotes

“Any macro discussions will be interesting, especially in the context of gauging the central bank's latest thoughts on how they are incorporating the new Labour government policies. Here we already know that the RBNZ policy reaction function hasn't been materially thwarted, with a chance of a 2H18 rate hike still likely in an economy that has little slack left.”

“However, inflation surprises in 1H18 hold the key to any RBNZ re-pricing story. For now, we look for NZD to remain buffered by a soft USD environment and this could see stability in the 0.68-0.70 range (risks to the bullish side).”