Macro, FX and Rates Strategist

Ishaan Dev Kapoor

Four years' front-office markets sales: FX and rates sales at HSBC covering EM, then FX sales with rates strategy at CBA as Senior Associate. Combines deep understanding of markets , macro and geopolitics.

The Flightless Hike, Marked to Market: The RBNZ Did What the Data Said

FX & Rates

<ul>
<li>Inflation is 1pp above band, but expectations are anchored, unemployment is at a decade high, and domestic inflation is decelerating. The ~4 hikes priced (to ~3.46% terminal) are too rich.</li>
<li>2 September MPS is the catalyst: receive NZD 1y1y at 3.90%, target 3.55%, stop 4.05%. Data undershoot May projections; a held or trimmed track leaves pricing two hikes rich.</li>
<li>The 7 November election adds unpriced optionality. Labour has pledged to restore the employment mandate; a dual-mandate committee facing decade-high unemployment is unlikely to deliver the marginal hikes priced in.</li>
</ul>


Inflation is 1pp above band, but expectations are anchored, unemployment is at a decade high, and domestic inflation is decelerating. The ~4 hikes priced (to ~3.46% terminal) are too rich.
2 September MPS is the catalyst: receive NZD 1y1y at 3.90%, target 3.55%, stop 4.05%. Data undershoot May projections; a held or trimmed track leaves pricing two hikes rich.
The 7 November election adds unpriced optionality. Labour has pledged to restore the employment mandate; a dual-mandate committee facing decade-high unemployment is unlikely to deliver the marginal hikes priced in.


The Flightless Hike: Receiving NZD 1y1y Ahead of the September MPS