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Daily Alert: ASB revises up its OCR view after strong NZ inflation print

  • NZ rates and the NZD firmed after NZ CPI inflation topped ASB, market and RBNZ expectations, with the 7.3% annual print the highest in more than 30 years
  • More restrictive OCR settings look to be needed, and ASB now expect 50bp hikes in August and October, a 25bp November hike and a 3.75% end of 2022 OCR peak. However, persistently high inflation runs the risk of more aggressive OCR action, including a possible 75bp August hike and higher OCR endpoint this cycle
  • Markets remained twitchy overnight, with recession fears lurking as central banks tackle what is looking to be increasingly entrenched high inflation

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