RESEARCH ROUNDUP: RBNZ More Upbeat, Keeps Door Open for Rate Cut
(Bloomberg) -- RBNZ statement is slightly more upbeat on economic assessment and hints of a small chance of just one more rate cut this year to temper the strength of the kiwi, analysts from ANZ, Capital Economics and Barclays say.
- RBNZ kept key rate at 2.25% today, saying it expects inflation to accelerate and is concerned about house prices
- Governor Wheeler says further easing may still be needed
- ANZ Wellington (Cameron Bagrie)
- Door is open to a cut, on kiwi strength more than anything
- Sees odds of a cut in August at just over 50%
- Also sees increasingly credible scenarios where no further easing is delivered
- Besides dairy, the economy is performing well
- Capital Economics (Paul Dales)
- Still sees a chance that rates may have to decline to 1.75%, although not until very late this year or even next year
- RBNZ moving slower for three reasons:
- Less concerned on global outlook and previous fall in inflation expectations
- More positive on the outlook for GDP growth and inflation
- RBNZ has become less worried by recent kiwi strength and more worried by the recent strength of the housing market
- Barclays (David Fernandez)
- Expects RBNZ to ease by another 25 bp in 4Q16, after impact of potential macro-prudential measures are felt in property market
- RBNZ seems less concern on NZD levels with kiwi depreciation dialed back to “expectation” from “desirable”, reflecting reduced concerns over weakness in dairy sector despite “export prices below break-even levels for most farmers”
Alert:
HALISTER1Source: BFW (Bloomberg First Word)
People Cameron Bagrie (Anz Natl Bank Ltd)
David Fernandez (Eton Park Capital Management LP)
Paul Dales (Capital Economics Ltd)
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