Markets Outlook

Latest edition · August 17, 2026

20260817 BNZMO

BNZ expects the RBNZ to continue removing monetary stimulus at its 2 September MPS amid resilient growth data and CPI tracking above bank forecasts. Rates and FX markets are seen consolidating within established ranges, with NZD/USD expected to trade between 0.56 and 0.60 in Q3.

New Zealand business surveys and card spending indicate improving momentum with annual GDP growth around 2%, presenting upside risks to near-term activity despite soft housing market indicators. Inflation metrics and 5-year inflation expectations remain elevated above the RBNZ's 2% target, underpinning BNZ's expectation for further rate hikes toward a 3.5% peak. In fixed interest, BNZ sees value in paying October OIS versus December as tightening is underpriced. In FX, the NZD remains constrained by domestic pre-election political uncertainty and relative interest rate differentials.

Key takeaways from the latest edition

• 1.NZ growth indicators (PMI/PSI, electronic card transactions) suggest Q3 GDP pickup and mild upside risk to near-term forecasts, supporting continued RBNZ monetary stimulus removal on 2 September.
• 2.The market is underpricing RBNZ tightening risk for October, making paying October meeting-dated OIS against receiving December an attractive front-loading curve trade.
• 3.NZD remains range-bound between 0.56 and 0.60, facing headwinds from domestic election political risks and relatively loose monetary policy compared to global peers.

What this series covers

• Growth and inflation
• Global Watch
• Key Event Previews
• Fixed Interest Market
• Foreign Exchange Market
• Technicals
• Quarterly Forecasts
• Annual Forecasts
• Key Upcoming Events
• Historical Data
• Contact Details

Edition archive

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  August 17, 2026

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  June 29, 2026

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  June 8, 2026

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  June 2, 2026

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  May 11, 2026