Any New Zealanders looking to get over to Brazil will be pleased to learn that they have just over 1% more purchasing power, with the NZD stronger by 1% across...

Any New Zealanders looking to get over to Brazil will be pleased to learn that they have just over 1% more purchasing power, with the NZD stronger by 1% across the G10 space as well. The major event risk has now passed, with the RBNZ forecasting that three-month bills should be at 4% by year-end. Given the swaps market was pricing in 61 basis points (some 14 basis points discount to the RBNZ forecast) you can see why the kiwi has been heavily bid today. Short-term positioning plays a huge role in trading and while the market was clearly positioned for a more nuanced approach from the central bank (given recent soft diary prices and better migration), the reality was that we are left with a central keen to push interest rates to more neutral levels. (VIEW LINK)