WLTW

Willis Towers Watson Public Limited Company

231.56
USD
-1.19%
231.56
USD
-1.19%
197.63 271.87
52 weeks
52 weeks

Mkt Cap 28.85B

Shares Out 124.61M

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BUZZ-COMMENT-RBNZ to hike 50 basis points - forward guidance in focus

Repeats from Tuesday with no changes May 24 (Reuters) - The Reserve Bank of New Zealand is widely expected to deliver a 50-basis-point rise in the official cash rate to 2.0% at Wednesday's policy meeting, but the main focus will be on forward guidance. All but one of 21 economists in the latest Reuters poll forecast a second half-point rate hike, but there is a split in predictions on whether there will be another such move in July or a return to the usual pace of 25 basis points. RBNZWATCHindicates a similar split, with a 50-basis-point hike fully priced in for Wednesday and a 50% chance of another such hike in July. Those arguing for the RBNZ to remain aggressive in July point to rapidly rising inflation requiring the central bank to take strong actionearly, to avoid more painful tightening later in the cycle. The rationale for the RBNZ to revert to 25-basis-point hikes after Wednesday is based on indications the economy is already starting to slow while house prices are falling. This view assumes the RBNZ will be more data-dependent, but still signal the OCR rising to around 3.0% by year-end. If the RBNZ signals a strong chance of a follow-up half-point hike in July, the NZD/USD will likely rise and at least test the 38.2 Fibonacci retracement of the 0.7034-0.6219 drop at 0.6530. If the RBNZ is less hawkish than expected, the NZD/USD will likely drift back towards support levels at the 21-day moving average around 0.6400 and the 10 DMA around 0.6350. For more click on FXBUZ (John Noonan is a Reuters market analyst. The views expressed are his own. Editing by Sonali Desai) ((john.noonan@thomsonreuters.com;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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