New Zealand (NZ) markets remain cautious ahead of the key Reserve Bank of New Zealand (RBNZ) Interest Rate Decision, up for publishing at 02:00 AM GMT on Wednesday.

While portraying the mood, the benchmark 10-year Treasury yields drop to the lowest level since April 18, down 0.30% around 3.443% at the latest. On the same line is New Zealand’s key equity index NZX 50 which extends the previous day’s losses, down 0.11% intraday by the press time.

The reason for the latest pessimism in the market, despite the widely anticipated rate hike of 50 basis points (bps) to the Official Cash Rate (OCR) of 1.5%, could be linked to the recently downbeat NZ Q1 2022 Retail Sales.

It’s worth noting that the mostly priced-in rate hike gives rise to a view that any disappointment, either via softer rate action or from the Rate Statement, will have larger repercussions.

Read: Reserve Bank of New Zealand Preview: Will they step up their tightening game?