MUFG Research previews this week's RBNZ and BoC September policy meetings.

"The RBNZ is set to hike while the Bank of Canada is likely to remain on hold. The RBNZ has been cautious on hiking rates from the current accommodative level (2.50%) but the inflation backdrop will compel action tomorrow especially given the renewed move higher in energy prices. Still, there is 100bps of tightening in the RBNZ OIS curve and we remain scpetical of the RBNZ delivering that amount of tightening over the next 12 months," MUFG notes.

"The Bank of Canada has other risks to consider following the escalation of the trade war with the US and the risk of auto, auto parts, steel and light & heavy truck tariffs being lifted from 25% to 50% at the start of 2027 will act to dampen Canadian corporate sentiment. The Canadian dollar will likely continue to underperform until there is clarity on tariffs in both direction," MUFG adds.