Hikers and cutters: the RBNZ tightens while Türkiye eases

Wellington goes hawkish

Three banks now expect the Reserve Bank of New Zealand to raise rates on October 28. ING forecasts a 25bp hike, aligning with market pricing; ANZ expects the same, taking the Official Cash Rate to 3.00%. Westpac changed its call this week — previously it expected a pause — saying core inflation pressures are elevated and market pricing is primed for a 25bp move. m:…4594 m:…2909 m:…2069

The case is built on three forces. Headline CPI slowed to 3.7% in the September quarter from 4.1%, but core measures moved the other way: services inflation accelerated half a point to 3.1%, and ANZ's review calls the core read more hawkish than expected. Oil prices are up around 20% since the September meeting — roughly $20 above the RBNZ's own assumption on the Dubai benchmark — and the trade-weighted kiwi tumbled 4% in September. ANZ's arithmetic: the currency surprise alone is worth three or four 25bp hikes in the RBNZ's model track, and the oil shock could add another 30–60bp. m:…9411 m:…4594 m:…2909

Westpac's CPI note shows where the stickiness lives: council rates up 6.2%, electricity up 9.3% over the year, international airfares up 14% — while petrol and diesel actually fell 6.5% and 16% respectively. Headline inflation, Westpac warns, could reaccelerate above 4% before year-end. m:…2069

The path ahead looks longer than one hike. ING expects another move in either December or February, with a slight preference for February, and puts the terminal rate at 3.25 to 3.5% — with the statement likely to keep the door open to a December hike and signal a longer, faster hiking cycle. Westpac's survey of administered prices adds ballast: water supply charges up 7.5% in the quarter, food prices up 1% on fresh vegetables, and housing rents flat — the rare offset. m:…4594 m:…2069

Ankara goes the other way

On the same day, Türkiye's central bank cut. The Monetary Policy Committee lowered the one-week repo rate from 37% to 36%, with the overnight lending and borrowing rates stepping down to 39% and 34.5%. The bank's reasoning: the underlying inflation trend is decelerating and domestic demand is weak enough to limit pass-through of supply shocks — even as elevated energy prices remain an upside risk. The stance stays tight until price stability is achieved, and the bank says it will move meeting-by-meeting, tightening again if the inflation outlook deteriorates. m:…5801

BBVA's read: a cautious easing step, not the start of a smooth cycle. The bank forecasts the policy rate staying at 36% until late in the first quarter of 2027, with the easing path possibly pausing along the way. One condition for more: if year-end inflation comes in below 30%, another 100bp cut could follow in December. BBVA also expects the central bank to keep unwinding the lira's accumulated real appreciation through its exchange-rate strategy. m:…5131

The committee kept its escape hatches open too: the stance will tighten again if the inflation outlook deteriorates significantly and persistently, and the bank says its aim is to reach the 5% medium-term inflation target. BBVA flags the risk the other way — upside risks tilted by unanchored expectations, and core-inflation moderation in the fourth quarter of 2026 that could reverse in early 2027. m:…5801 m:…5131

Same shock, opposite medicine

This suggests both banks are reacting to the same oil shock; they just face different transmission. In New Zealand the shock lands through a 4%-weaker currency and sticky domestic costs, forcing a hike. In Türkiye it lands on an economy where demand is already weak and disinflation is underway, so the bank can cut while promising to stay tight. The professionals' read: the global easing story is not a cycle anymore — it is a patchwork, decided meeting by meeting. m:…4594 m:…5801