30 Apr 2015
RBNZ : An easier bias - ANZ
FXStreet (Bali) - While an easier bias, Cameron Bagrie, Chief Economist at ANZ, notes that the RBNZ stopped short of an outright easing bias.
Key Quotes
"RBNZ stopped short of an outright easing bias in our view. Given an expectation that “Underlying inflation remains low and is expected to pick up gradually” we suspect the RBNZ’s underlying forecasts, if presented today, would still maintain a flat OCR profile.
"One can focus on the word gradually, but more important is the term that underlying inflation is still expected to pick up. This is inconsistent with an outright easing bias. But we certainly perceive an easier bias."
"An extended period of stable OCR settings remains our base-line forecast. However, if core inflation remains low (we are watching our Monthly Inflation Gauge closely), in combination with an elevated NZD, dairy sector challenges and an eventual prudential response to housing, a reassessment of current OCR settings would be warranted."
"The RBNZ may be watching measures of wage and price-setting behaviour, but in practice the former is lagging and the latter are partial; inflation expectations measures are notoriously concurrent with headline inflation."
"In that situation we favour going with what you know on the inflation front, and hence we’ll be watching our monthly gauge closely."
Key Quotes
"RBNZ stopped short of an outright easing bias in our view. Given an expectation that “Underlying inflation remains low and is expected to pick up gradually” we suspect the RBNZ’s underlying forecasts, if presented today, would still maintain a flat OCR profile.
"One can focus on the word gradually, but more important is the term that underlying inflation is still expected to pick up. This is inconsistent with an outright easing bias. But we certainly perceive an easier bias."
"An extended period of stable OCR settings remains our base-line forecast. However, if core inflation remains low (we are watching our Monthly Inflation Gauge closely), in combination with an elevated NZD, dairy sector challenges and an eventual prudential response to housing, a reassessment of current OCR settings would be warranted."
"The RBNZ may be watching measures of wage and price-setting behaviour, but in practice the former is lagging and the latter are partial; inflation expectations measures are notoriously concurrent with headline inflation."
"In that situation we favour going with what you know on the inflation front, and hence we’ll be watching our monthly gauge closely."