That’s because the RBNZ released its monetary policy decision the same day Trump announced the ceasefire.
The central bank clearly shifted to a hawkish stance as they added a new paragraph in the statement saying that “decisive and timely increases in the OCR would be required” if core inflation, wage growth and inflation expectations do not remain contained.
Moreover, Governor Breman acknowledged that the committee discussed raising the OCR already at this week’s meeting although that didn’t find a strong consensus. She has also added that the neutral rate sits around 3.00% which is 75 bps above the current 2.25% rate, so that’s why traders increased the expected tightening to 75 bps by year-end.
It goes without saying that everything hinges on US-Iran negotiations now. Iran is shooting for the stars with its 10-point plan, so there’s going to be some noise tomorrow and likely another round/s of negotiations in the next weeks
