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RBA-dated OIS pricing is flat to 2bps softer across 2025 meetings, ahead of today's RBA Policy Decision with economists widely anticipating a 25bp rate cut. 

• The RBA statement and updated forecasts will be released at 1430 AEDT, with Governor Bullock’s press conference at 1530 AEDT
• A 25bp rate cut in April remains more than fully priced (122%), while the probability of a cut today stands at 85%, based on an effective cash rate of 4.34%.
• Historically, it would be highly unusual for the RBA to diverge from market expectations, particularly given its lack of any official or unofficial pushback—a stance it has actively taken in the past.
• The last time the RBA defied market expectations by holding rates despite a 75%+ probability of a cut was April 2015, and before that, November 2012. In both instances, the RBA delivered a 25bp cut at the following meeting.

Figure 1: RBA-Dated OIS – Today Vs. Yesterday

Source: MNI – Market News / Bloomberg

• AUD/NZD broke above the 1.1100 ceiling it had struggled so much to trade above over the past 5 months last week, however it has been short lived, we last trade just below here at 1.1096, although we have manage to hold above the 20-day EMA level, bouncing right off it twice over the past day.
• Focus is squarely on the RBA later today, the market is pricing in about a 90% chance of a 25bps cut, while tomorrow the RBNZ meets with the market currently pricing in almost 100% chance of a 50bps cut.
• All eyes on the statement with dovish hint likely to see the AUD/NZD trend lower as expected rate cuts from both the RBA and RBNZ drive convergence in medium-term yields, with the Australian curve having much more room to adjust downward, given New Zealand has already front-loaded cuts. (per BBG)
• Key levels to watch ahead of the CB meetings. A hawkish RBA is likely to see a move higher back to tests the Feb 14th highs of 1.1149, a break here would open a move to Nov highs of 1.1180, while to the downside a break of the 20-Day EMA at 1.1083, would likely see a test of the recent lower bounds at 1.1000 and the 200-day EMA at 1.0991.
• The AU-NZ 2yr swap spread has traded within narrow ranges this year, last 37bps.

Chart. AUD/NZD vs 2yr Swap

RBNZ dated OIS pricing is slightly softer across meetings today, ahead of the RBNZ Policy Decision tomorrow.

• The RBNZ decision is widely expected to cut rates 50bp again to 3.75%. Revised staff forecasts will also be published with the decision at 1200 AEDT/1400 NZDT and Governor Orr’s press conference taking place at 1300 AEDT/1500 NZDT.
• All 22 analysts surveyed by Bloomberg are forecasting a 50bp rate cut and the RBNZ shadow board is recommending 50bp of easing.
• Notably, OIS pricing is 2–17bps firmer than pre-Q4 Labour Market data levels from February 4.
• Nevertheless, 49bps of easing is priced for Wednesday, with a cumulative 112bps by November 2025.

Figure 1: RBNZ Dated OIS Today vs. Pre-Q4 Labour Market Data (%)

Source: MNI – Market News / Bloomberg