I posted a preview of the meeting here:
NZD - RBNZ meeting this week - preview
- Adam posted Credit Agricole's here: NZD: No easing bias from the RBNZ this week: 5 reasons - Credit Agricole
- And Mike had the latest Reuters poll of expectations here: Economists see RBNZ leaving interest rates on hold this week
This now, via Westpac (in brief & bolding mine):
We expect the RBNZ to remain on hold at 1.75%
- & to repeat the message it expects to remain so for a long time
- Markets should be unmoved.
In its February MPS, the RBNZ left the OCR unchanged and pointedly moved away from an easing bias to a more neutral stance
- In a speech three weeks ago, the Governor reiterated that "we consider the risks evenly balanced in respect of the OCR"
- We suspect the message will be largely unchanged this time.
Our central scenario is defined by a balanced tone overall, with the policy message in the final paragraph unchanged. This outcome, to which we assign a 90% probability, would leave markets roughly unmoved.
Our hawkish scenario (5% probability) has the RBNZ tilting the narrative towards the main positive developments since February: higher near term inflation, the lower NZD, and global growth outlook. The market's reaction to a hawkish surprise would be significant because it is already biased in this direction.
Our dovish scenario (5% probability) has the RBNZ tilting the narrative the other way, ntoing slower GDP growth, cooler housing, lower dairy prices, and geopolitical risks. The market's reaction would be skeptical and modest.
