Credit Agricole CIB Research expects the RBNZ to leave rates on hold this week arguing that it's unlikely for the central bank to move to an easing bias that could weigh on NZD.

CACIB outlines 5 reasons behind this view:

1- Governor Graeme Wheeler said two weeks ago said that "the risks around the OCR are equally weighted."

2- The RBNZ is likely to wait for an MPS and forecast review to do change its bias; this week is a simple OCR review.

3- The TWI has averaged below where the RBNZ had forecast for the quarter and has responded to weaker dairy prices.

4- Fonterra had kept its forecast pay out to dairy farmers for 2016/2017 constant for several months

5- Inflation expectations have jumped back up to 1.92% and close to the center of the RBNZ's inflation targeting band.

Source: Credit Agricole CIB Research, efxnews.