Following the Reserve Bank of New Zealand’s hike at the start of October, markets are already pricing for a second hike at the November meeting as it faces pressure to take action in the face of surging consumer prices.
“Central banks are responding more aggressively to inflation,” said John Briggs, global head of desk strategy at NatWest Markets in Stamford, Connecticut. “So markets are pricing in central banks signaling the likelihood of higher rates, and so curves are flattening in response.”
--With assistance from Libby Cherry, Stephen Kirkland and Garfield Reynolds.