Wednesday's Reserve Bank of New Zealand meeting headlines the week and OIS markets have 45bps of tightening priced into the meeting, and the terminal rate of 5.3%.

The RBNZ's Shadow Board recommended a 50bps OCR increase this morning citing strong inflationary pressures.

Although local analysts still overwhelmingly anticipate a 50bp hike, the market is pricing in a small chance of a lesser move due to the devastation wrought by Cyclone Gabrielle. ''That’s fair,'' analysts at ANZ Bank said. ''It certainly can’t be ruled out. But in our view, monetary policy is not the right tool for the job, and could do more harm than good,'' they analysts argued who say ''NZD will be hypersensitive to the RBNZ’s decision and tone.''