A BNZ note this morning on the Reserve Bank of New Zealand statement yesterday
In summary from the bank:
- Central bank moves to formal easing bias
- Spooked by international developments
- And despite inflation and employment being broadly on target
- May cut live but unlikely; Chance of hike obliterated
In more detail:
We really can't believe that we are saying this but a May rate cut is now very much alive. And its likelihood may, at the margin, be bolstered by the fact that:
- It has been set up by this review; and
- It's the first decision to be made by a committee.
That said, we caution that folk should not get carried away with this expectation. Surely for the rate cut to be realized:
- Global concerns need to rise;
- The labour market needs to look weaker than RBNZ expectations; and
- Inflationary pressures should soften.
We're not convinced that any (let alone all) of these things will come to pass.
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ICYMI (the RBNZ yesterday), (read from the bottom up)
- NZD traders - Don't forget folks, RBNZ Governor Orr will be speaking on Friday
- What does the RBNZ move today mean for the RBA? 'Pressure on'
- Responses to the RBNZ continue - another bank looking for a 2019 rate cut
- Responses to the RBNZ continue
- Responses to the RBNZ policy guidance shift to dovish
- ANZ in New Zealand tips an RBNZ rate cut in November 2019 but say the risk is earlier
- NZD (and AUD) marked down on RBNZ dovish statement
- RBNZ on hold, as expected
