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9 Dec 2015
RBNZ: Cutting but not yet - BNPP
FXStreet (Delhi) – Research Team at BNP Paribas, suggests that the RBNZ is scheduled to make a policy announcement on Thursday local time (20:00 GMT on Wednesday).
Key Quotes
“Rates markets are not pricing in a full rate cut until March but the risk is that the negative backdrop for global commodity prices prompts an earlier move from the RBNZ.”
“Elsewhere, commenting on Tuesday afternoon BoC Governor Poloz did not signal any significant changes to his assessment of the economy and current policy stance reiterating that risks to the outlook are roughly balanced. However he did indicate that the BoC had lowered their estimate of the effective lower bound to Canadian policy rates to -0.50% from 0.25% previously. Arguably, this should make the BoC more comfortable cutting rates further from their current level of 0.50% if needed and, in our view, markets continue to under-price the risk of further policy easing in 2016. USDCAD has reached our year-end 2015 target of 1.36 and we see further gains to 1.40 next year.”
Key Quotes
“Rates markets are not pricing in a full rate cut until March but the risk is that the negative backdrop for global commodity prices prompts an earlier move from the RBNZ.”
“Elsewhere, commenting on Tuesday afternoon BoC Governor Poloz did not signal any significant changes to his assessment of the economy and current policy stance reiterating that risks to the outlook are roughly balanced. However he did indicate that the BoC had lowered their estimate of the effective lower bound to Canadian policy rates to -0.50% from 0.25% previously. Arguably, this should make the BoC more comfortable cutting rates further from their current level of 0.50% if needed and, in our view, markets continue to under-price the risk of further policy easing in 2016. USDCAD has reached our year-end 2015 target of 1.36 and we see further gains to 1.40 next year.”