The Reserve Bank of New Zealand survey is due at 0200 GMT. Preview here:
- the 2-year ahead inflation series is expected to show another sharp lift.
- The correlation with actual headline CPI inflation is high and last time inflation was around 5%, the expectations series was close to 3%, so there is still plenty of upside potential from last quarter’s reading of 2.27%.
- This is little information content in this survey, but there’s a chance of jumpy traders over-reacting to a high print.
Bolding mine, NZD traders take note.
A rate hike from the RBNZ is expected on November 24. 25 basis points is expected but there is just under a 50% chance of a 50bp rate hike according to market pricing. A high reading in the survey today is likely to spur the chance of 50bps even further.