OCR contracts

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jmvm
Re: OCR Increase stocks
October 21, 2009 10:20AM
related news

[www.nzherald.co.nz]

Quote

The market has moved to price in earlier and more aggressive rate hikes from the RBNZ, with close to a 40 per cent chance of a 25 basis point hike in December

At 11c for the Jan stock I might stock up on a few of these.... April stock looking like a reasonable bet.
Taurusport
Re: OCR Increase stocks
October 21, 2009 02:14PM
Bollard is reported as saying a high NZ currency isn't an impediment to a rate rise: [www.bloomberg.com]

I wonder whether this is the start of him paving the way for an early rise?
Artist
Re: OCR Increase stocks
October 21, 2009 02:16PM
pretty much yes.
MrMag
Re: OCR Increase stocks
October 28, 2009 11:01AM
ASB is predicting first raise in april, the raise before april 2010 stocks could be a mover in the next few days depending on how the next announcement is worded from the RBNZ.

www.mortgagerates.co.nz
Wulff
Re: OCR Increase stocks
October 29, 2009 11:37AM
Allan Bollard quote:

"no urgency to begin withdrawing monetary policy stimulus and we expect to keep the OCR at the current level until the second half of 2010."

NZ Herald
MrMag
Re: OCR Increase stocks
October 29, 2009 02:30PM
The previous article I linked, said that it was expected that RBNZ would start hinting at earlier rate hikes. This is exactly what they did. Bollard has now brought his prediction of a rate hike in latter 2010 back to second half of 2010. I know these sound similar but if things keep recovering as they are I think Bollard will review again. At this stage I'm going to hold on to my long term OCR stocks.
mproctornz
Re: OCR Increase stocks
October 29, 2009 03:34PM
I think maybe a little much has been made of the change in wording. "The latter part of 2010" at least CAN bear the same meaning as "the second half of 2010."

Divide 2010 into two parts, and the hike will happen in the latter of the two parts. It seems to me that the most reasonable way to divide 2010 into two parts is to make each part of equal length. That's identical to saying in the second half.

For sure, it doesn't NEED to be read that way. But it seems (to me at least) to be the most sensible way.
MikesRetirementFund
Re: OCR Increase stocks
October 29, 2009 04:46PM
So why change it? (Aside from the fact that it was gramatically incorrect.)
Dibbo
Re: OCR Increase stocks
October 29, 2009 04:48PM
The RBNZ's published forecasts in September explictly had the first hike in Q4 2010, hence why they used 'latter part' at the time (and back to April). They have now given themselves the option of bringing this forward to July, which is not a decision they would have taken randomly. I tend to agree with MrMag that the RBNZ will ultimately come a little further forward, but obviously the Dec and Jan meetings are exceptionally unlikely prospects (which financial markets have moved to reflect today). March looks the absolute earliest.
mproctornz
Re: OCR Increase stocks
October 29, 2009 05:25PM
There are published forecasts!? Could you link please?

So why change it? Fair point. I take it the announcements often repeat tracts verbatim from previous announcements?
Dibbo
Re: OCR Increase stocks
October 30, 2009 10:18AM
[www.rbnz.govt.nz]

You need to look at the 90-day rate track on page 23..this begins to nudge up in Dec 10 qtr.
Artist
Re: OCR Increase stocks
October 30, 2009 10:21AM
Its the art of Central Banker speak, where one word, or the order of words rests upon the flow billions of billions of dollars. Every word is very deliberate, RBNZ has changed its stance. Read through the comments and see this was predicted to happen, is the stock price adjustment an overreaction?
Artist
Re: OCR Increase stocks
November 02, 2009 11:13AM
Nice random article

OCR losing its merit in NZ financial market
[www.thesheet.com]
andrew93
Re: OCR Increase stocks
November 02, 2009 02:11PM
Banks and deriviative traders don't do stability well; they like/need volatility.


Off Topic:
I reckon we should impose some sort of hefty tax on NZD denominated investments originating offshore. Then we might see the Belgian dentists and Japanese housewives put their money into investments denominated in other currencies, and the false* level of support for our currency would evaporate when the various NZD bonds mature.

*as in: the support for the currency is not based on anything economic/tangible within the shores of this country.



Edited 2 time(s). Last edit at 11/02/2009 02:12PM by andrew93.
corbusian
Re: OCR Increase stocks
November 13, 2009 03:46PM
[tvnz.co.nz]

"...Market pricing now has just an 85 % chance of a 0.25% interest hike in March 2010. This is a big climb down...."

a big climbdown indeed but why is the ipredict stock for this ranging between 17 and 30% range? I must be missing something. I do think ipredict is closer to the mark ..though I'm certainly no expert!
Dibbo
Re: OCR Increase stocks
November 13, 2009 04:31PM
The market pricing is closer to 75% today...but the bottom line is that the markets thinks that Bollard will back down further on his view... personally very much doubt that he will back down enough to see hike rates as soon as the March meeting (he will be desperate to avoid doing so, even if he probably should). The data over the past week has hurt his cause. Hard to see him tightening if we dont see a decent lift in consumer spending.
Artist
Re: OCR Increase stocks
November 13, 2009 04:39PM
Does consumer spending follow the housing market to a degree?
Dibbo
Re: OCR Increase stocks
November 13, 2009 06:28PM
Yes, normally, but it isn't really happening to any great degree so far (see comments by the Warehouse today - the are undershooting Budget). The analysis that will drive the RBNZ's March meeting will take place in February and that isn't that far away now (and given the data lags, the RBNZ will know little about how 2010 has kicked off by then). That's why the market is slowly pushing out the timing of the first tightening. I think March is very unlikely. If things go well, the RBNZ will begin to talk about future tightening in March, but no more.
jmvm
Re: OCR Increase stocks
November 30, 2009 12:05PM
The big surge in building consents data released today - 11% Oct 09 is a big jump up from that seen over past months - 3.5% Sept 09, 1.7% Aug 09. This will put pressure on the RBNZ for an earlier move that previously expected.

The latest Reuters poll has all 16 economists expecting the central bank to hold rates steady at its next meeting on Dec. 10.

With the inflation expectations data out last week current financial market pricing (from Reuters) has fully priced in a 25 basis point hike by April.

Todays building consent data reinforces the likelihood of pressure on the RBNZ causing a 25 bps raise by April.

Full disclosure : I'm long OCR.INCR.APR10

[www.nzherald.co.nz]
corbusian
Re: OCR Increase stocks
November 30, 2009 03:05PM
Just got building consent through for my new abode... obviously I've skewed the figures!
Dibbo
Re: OCR Increase stocks
November 30, 2009 03:32PM
FWIW I'm the short on the other side of you jmvm - take a look at the commercial consents figures in the same report. Residential is rebounding but the commercial sector is going backwards - last three months down about 16% on last year. Net result is that the sector as a whole is going nowhere. Can't see the RB hiking before April on those figures, especially as retail is still going nowhere fast.
Artist
Re: OCR Increase stocks
November 30, 2009 04:05PM
what are peoples thoughts on July? it had dropped to 69cents earlier today
Dibbo
Re: OCR Increase stocks
November 30, 2009 07:03PM
That looks about fair to me but don't expect the RBNZ to say as much next week...they will still be talking about hiking in second half of next year. We do need to start seeing some action in the retail sales numbers and probably some better jobs data (maybe in the Q1 HLFS in early May) to get Bollard over the line earlier. Its not happening yet and we are going to need to see several months of solid increases before a stronger trend will be established.
Taurusport
Re: OCR Increase stocks
December 01, 2009 04:13PM
The Institute of Economic Research is predicting Bollard will hold off raising rates until the third quarter of next year: [www.bloomberg.com]
MikesRetirementFund
Re: OCR Increase stocks
December 01, 2009 10:23PM
That's odd... NZIER seem to be talking down the recovery like everyone else, but their forecast of -0.9% for calendar 2009 would require monster growth in the second half of the year - more than 1% each quarter by my count. It's hard to picture the RBNZ doggedly sticking to their guns if they see numbers like that.
Artist
Re: OCR Increase stocks
December 11, 2009 09:28AM
Large spike in swap rates after yesterday:

"Current market pricing is now consistent with about a 75% chance of a 25bps hike in March and the cash rate rising to around 4.50% by the end of 2010."

[www.interest.co.nz]
dutching
Re: OCR Increase stocks
February 17, 2010 08:35PM
On 15th of February (NZ 16 February)
some fat cat bought zillions of put options on RBNZ OCR:
[www.bloomberg.com]
and one of us followed:
[www.ipredict.co.nz]

Could it be the decision of not increasing GST this year leaked to swiss gnomes?

___

It is difficult to predict, especially others' predictions.
Patch
Re: OCR Increase stocks
February 28, 2010 12:42PM
The July 10 has been drilled lately and I'm struggling to make sense of it, the OIS markets have 23points of tightening priced in by july suggesting this stock be at least closer to 0.5000 than .3500.

With these prices I'm getting long, but was wondering if anyone could shed some light on the market? Am I missing something or is one trader out there getting mega short to hedge something?

Hmmm hopefully more will be reveled at the march review regarding bollards thinking around timing.
ECrampton
Re: OCR Increase stocks
March 02, 2010 03:45PM
Aussie OCR stocks going nuts in the thinned out MM environment.
pipe42
Re: OCR Increase stocks
March 02, 2010 03:49PM
They look reasonably smooth here:

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