Consensus expectations are for the Reserve Bank of New Zealand to hold the cash rate unchanged at this June meeting
Earlier:
ASB are also expecting the RBNZ will leave its policy settings unchanged
- However, the bank will emphasise that it still has further options to tackle the weak outlook for the economy and inflation, should it be required to use them.
- But, for now, the economy appears to be improving at a slightly faster rate than the RBNZ assumed. And the fact we have moved to Alert Level 1 far earlier than the Bank assumed means this will continue in the short-term.
- The Bank has also plenty of headroom under its $60b QE cap to keep buying around $1b of government bonds per week. It will have to be raised at some point thought, but this is a story for later in the year.
There will be a brief commentary accompanying the decision, due at 0200GMT on Wednesday, watch for a slightly less downbeat tone from the Bank. This should act a positive input for the NZD, but as you'll have read in the preview above and the previous ones posted this is the expected view now so be wary of a sell the fact response from the NZD.
