Will the RBNZ Cut Today?
Markets are getting set for a big meeting of the RBNZ where it is still up in the air as to whether or not we will see a cut.
The probability is suggesting that the odds of a cut are a bit over 60% at this stage and while that is far from a certainty, the balance of power looks like there will be a 25bp cut to 0.75%.
As we know, the RBNZ is one that is prepared to come out and shock us. It, of course, delivered a huge 50bp cut earlier in the year that absolutely caught the market and all the economists off-guard.
So today it is far from a certainty as to what will happen.
The suggestion my the experts is that the cut will come and the easing bias will remain, based on the fact that GDP growth still remains soft.
But we need to prepare for anything here.
Looking at the key levels of interest as we head into the release, 0.6325 looks a big one for me. If we do see a cut that level will be support and I suspect it will fall. That opens the door to a fall through 0.6300.
0.6250 would be where I think price could go if there is still an easing bias.
While a hold is not out of the question, if there is still a bais to ease, then perhaps a rally will be capped. Given that it is a 60% chance there is still room to bounce.
0.6370 and 0.6400 are probably at the upper end of where we will see a jump to.
Either way, we need to be open to all possibilities today and there could be some strong moves.
I’ll be keeping our readers updated via the Live Economic Calendar so be sure to keep a close watch in what should be an exciting event.
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