Rates as of 0500 GMT

Market Recap

The RBNZ hiked rates 50 bps as expected and promised more. It kept a hawkish stance in the statement following the meeting, saying

The Committee agreed it remains appropriate to continue to tighten monetary conditions at pace to maintain price stability and support maximum sustainable employment. The Committee is resolute in its commitment to ensure consumer price inflation returns to within the 1 to 3 percent target range.

Notice the terms at pace and resolute. This means further 50 bps hikes to come.

In the Summary Record of Meeting, it said
The Committee agreed to maintain its approach of briskly lifting the OCR until it is confident that monetary conditions are sufficient to constrain inflation expectations and bring consumer price inflation to within the target range.

Note the term briskly.

Nonetheless rate expectations fell slightly, perhaps because the statement included a reference to emerging mediumterm downside risks to economic activity. They also removed the mention of hiking at pace from the forward guidance, the last paragraph in the statement, although as I noted they did mention it elsewhere.

NZD initially fell after the meeting but quickly recovered.

The big mystery of the day was why was AUD the bestperforming currency? Im quite puzzled. The mood was generally riskoff and commodities didnt do so well oil Brent was down 5.7 despite OPEC predicting demand outstripping supply by 1mn barrels a day bd next…