Economic and event calendar in Asia Wednesday, May 13, 2026
The Reserve Bank of New Zealand's upcoming quarterly Survey of Inflation Expectations is poised to be a critical indicator of inflation psychology, as highlighted in the recent analysis from Westpac. Per the full note source, the survey's two-year ahead measure will be particularly scrutinized, as it reflects medium-term inflation expectations that could influence monetary policy decisions. With inflation pressures broadening across sectors, a confirmation of rising expectations could compel the RBNZ to reassess its current policy stance. This aligns with our view that the market should prepare for potential shifts in rate expectations ahead of the survey's release.
What the desk is arguing
The desk believes that the upcoming Survey of Inflation Expectations from the RBNZ is likely to show an increase in inflation expectations, which could have significant implications for monetary policy. Per the full note source, the survey is seen as a key test of whether recent price increases are becoming entrenched in the economy.
Westpac analysts have noted that inflation expectations were already on an upward trajectory prior to the recent rise in oil prices, suggesting that the survey results will be crucial in determining the RBNZ's next steps. If the two-year ahead measure reflects a further increase, it may signal a shift in inflation psychology that could necessitate a policy response.
Where it sits in our coverage
Our current consensus target for NZD/USD is 1.075, with a range between 1.04 and 1.12. Key firms contributing to this consensus include: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26)
This view aligns with jpmorgan, which anticipates a stronger NZD based on rising inflation expectations, while bofa holds a more cautious stance, placing their target at the lower end of the range. The desk's call is positioned towards the upper bound of the consensus spread, indicating a bullish outlook.
How other firms see it
Firms such as jpmorgan and citi are aligned in their expectations for rising inflation, suggesting a potential upward adjustment in NZD/USD. Conversely, bofa and deutsche are more skeptical, anticipating that inflation pressures may not lead to immediate policy changes.
Market participants should also monitor the NZD/AUD pair, as it may reflect the broader implications of RBNZ policy shifts and inflation expectations. Additionally, the AUD/USD trajectory could provide insights into regional economic dynamics that intersect with this thesis.
What the calendar says
With the RBNZ's Survey of Inflation Expectations due shortly, traders should be prepared for potential volatility in NZD/USD as the results are released. This event could significantly influence market positioning ahead of the RBNZ's next monetary policy meeting.
Key takeaways
- 01The RBNZ's Survey of Inflation Expectations is crucial for assessing medium-term inflation psychology.
- 02Westpac's analysis indicates that rising inflation expectations could compel a policy reassessment by the RBNZ.
- 03The two-year ahead measure will be the focal point for market participants gauging future rate expectations.
Market implications
Traders should watch for the two-year ahead inflation expectation figure from the RBNZ survey, as a significant increase could lead to a reassessment of rate expectations and impact NZD/USD levels. Positioning ahead of this event may create volatility in the currency pair.
The item of note is the Reserve Bank of New Zealand's quarterly Survey of Inflation Expectations. This is shaping up as a closely monitored test of whether the recent acceleration in consumer prices is feeding through into longer-term inflation psychology, according to analysis from Westpac. The survey, which captures the views of businesses, economists and other informed observers on where inflation is headed, is one of several the central bank will scrutinise for signs that higher prices are becoming entrenched.
The two-year ahead measure carries particular weight, acting as a proxy for medium-term inflation expectations that can influence wage negotiations, pricing behaviour and, ultimately, monetary policy settings. Westpac analysts note that expectations were already on an upward trajectory before the most recent rise in oil prices added further fuel to broader cost pressures. That earlier drift higher makes the upcoming print all the more consequential.
If the survey confirms another step up in the two-year measure, it would signal that inflation psychology is shifting in ways that may be difficult to reverse without a policy response. The risks, according to Westpac, are skewed to the upside. Increasingly widespread cost pressures have been evident in recent weeks, spanning a range of sectors and suggesting the inflationary impulse is broadening rather than narrowing.
This is consistent with signals from other forward-looking surveys, which have already recorded fresh advances in both expected inflation and pricing intentions among firms. For the RBNZ, the concern is not simply that inflation has risen in the near term, but that sustained price pressure could dislodge expectations from levels consistent with the bank's one-to-three percent target band. A survey outcome that reflects a further deterioration in expectations would increase pressure on the Monetary Policy Committee to reassess its current settings.
The result will be watched carefully by market participants pricing rate expectations, with the two-year ahead figure likely to draw the most immediate reaction. This article was written by Eamonn Sheridan at investinglive.com.
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