RBNZ Rate Hike Seen, But Hawkish Expectations May Be Too High

The Reserve Bank of New Zealand (RBNZ) is expected to raise interest rates by 25 basis points to 2.75% on Wednesday morning, according to ING's Francesco Pesole.

Markets are fully pricing in the move, but Pesole believes that current market expectations for further tightening may be too hawkish unless the RBNZ lifts its rate path significantly.

ING anticipates softer CPI projections and sees the New Zealand Dollar (NZD) slipping back below 0.5900 as the bank underwhelms hawkish expectations.