ANZ Bank's review of the RBNZ meeting yesterday
- The RBNZ still believes that the "Official Cash Rate (OCR) will remain at 1.75 percent for some time to come"
- The outlook for GDP growth has been revised down slightly
- Nonetheless, GDP is expected to grow above potential over the projections, with capacity pressures expected to tighten further
- Today's Statement could be interpreted as more dovish than it might have been
- Putting equal odds of the next move being a cut or a hike in the first paragraph sends a strong signal to the market that the Bank is very comfortable on the fence
- We expect the next move in the OCR to be a hike and have penciled in August next year
- This outlook may be tested if we do not see a broadening in inflationary pressures, or if current global wobbles take a turn for the worse
- The RBNZ's sanguine global growth forecasts look to us like a key source of downside risk
In short, they view that the central bank leaned towards the dovish side and the forecasts by the RBNZ implies a change in policy some time around mid-to-late 2019 which is far enough for the central bank to alter their strategy as conditions change.
They also provided a nice side-by-side comparison of the statement released:
