TD with a note on the Reserve Bank of New Zealand and the NZD, title
- RBNZ Dicing With Financial Stability
TD citing:
- housing credit 'upbeat'
- 'leap' in high LVR loans 'could threaten future financial stability '
On the RBNZ outlook, and for the kiwi:
- Healthy mortgage growth via high LVR loans should mitigate any appetite for OCR cuts, even if inflation is lingering below target for too long.
- We remain more constructive on the economy than the RBNZ and consensus, even though we recently pushed back the timing of the first OCR hike to November 2019
- While CFTC net shorts are near extremes for the NZD, we cannot see the NZD breaching the 50d MA of $US0.675 with the RBNZ talking up the risk of a rate cut at each opportunity (including on the sidelines in Jackson Hole)
