RBNZ expected to keep OCR at 2.25%; Wall St returns from long weekend
BP declines as board dumps chair over conduct.
The Reserve Bank of New Zealand is expected to keep the official cash rate at 2.25% at today’s review, with the monetary policy committee to shed more light on how the members voted.
Stocks on Wall Street were mixed as Micron Technology surged out of the weekend, propelling the tech-heavy Nasdaq Composite higher, while the Dow Jones Industrial Average lagged with oil major Chevron at the bottom of the blue-chip index as oil prices remained muted at the US and Iran continue working towards a peace plan despite recent strikes.
London-listed BP declined after its board voted to remove chair Albert Manifold over conduct issues.
And the local earnings season takes a bit of a breather, with payroll software firm PaySauce due to report its annual result and refrigeration systems company AoFrio holding its annual meeting.
On hold
The kiwi dollar traded at 58.37 US cents at 7am in Auckland from 58.49 cents yesterday, while the yield on the 10-year government bond was at 4.62% ahead of the Reserve Bank’s policy review, which is expected to keep the benchmark rate unchanged.
“No surveyed economists expect a rate change, while the OIS market assigns a 15% chance of a 25 basis point hike, reflecting the skewed risk around any policy surprise, with a rate hike seen as more likely than a rate cut,” Bank of New Zealand senior market strategist Jason Wong said in a note, referring to the overnight index swap market.
“There will be interest in the extent of any differences in views among MPC members, and in how much intent there is to tighten policy over the next year or so as the central bank moves away from an expansionary policy stance to combat rising inflation pressures.”
The monetary policy review comes ahead of the government’s budget, which is expected to continue the coalition’s focus on fiscal restraint ahead of the November election.
Meanwhile, US markets returned from the Memorial Day holiday, with tech stocks driving a 0.9% gain for the Nasdaq in late trading. Micron Technology soared 21%, crossing the US$1 trillion market capitalisation mark, while Qualcomm advanced on a new supply deal with automaker Stellantis.
The S&P 500 was up 0.5% in late trading, while the Dow dipped 0.4%, with Chevron, Cisco Systems and UnitedHealth Group weighing on the blue-chip index.
Still hoping
Investors remained optimistic that the US and Iran would reach a peace deal, despite recent clashes on the Strait of Hormuz. Brent crude oil futures dipped 0.2% to US$96.51 a barrel, while Polymarket prediction market pricing implied a 25% chance of a ceasefire by the end of May and a 55% chance by the end of June.
European markets were more muted, with the UK’s FTSE 100 up 0.2% as it returned from a long weekend, while Germany’s DAX fell 0.8% and France’s CAC 40 declined 1%.
BP dropped 4% after the board unanimously voted to remove chair Albert Manifold over governance standards, oversight and conduct issues raised with directors.
Greg Boland, market strategy consultant at Moomoo, said the growing trillion-dollar club highlighted the growing concentration around artificial intelligence infrastructure, cloud computing and semiconductors.
“Infratil may remain in focus today after yesterday’s 5.1% pullback following its result, as investors weigh strong long-term earnings guidance against recent sharp gains in the stock, while the broader NZX is expected to open cautiously firmer despite weaker ASX 200 futures and a softer Dow overnight, supported by ongoing strength in US technology stocks ahead of today’s RBNZ decision and tomorrow’s Budget 2026 announcement,” Boland said in a note.
Australian futures are pointing to a 0.2% decline for the S&P/ASX 200 index when trading opens across the Tasman.
No major local data are expected today, while PaySauce is due to report its annual result, with investors looking for details on the payroll software firm’s push into Australia. AoFrio is holding its annual meeting in Auckland today.
Reporting by Paul McBeth. Image from Curious News.
