1 May 2015
RBNZ easier rather than easing - ANZ
FXStreet (Bali) - According to the Research Team at ANZ, it is difficult to argue that the RBNZ are poised to ease imminently given their expectation for “inflation to pick up gradually”.
Key Quotes
"As subtle as the difference between these two words are, it’s key, for it is difficult to argue that the RBNZ are poised to ease imminently given their expectation for “inflation to pick up gradually”, even if they have explicitly said they can see a scenario that may warrant cuts."
"As such, while confirmation of the easier bias does validate yesterday’s relief rally in interest rates and notch lower in the Kiwi, what actually happens depends on the data, and on what others do (via the currency channel). With more calls for the RBA to ease (with the latest call by Peter Martin arguing that the AUD resurgence, weaker growth, soft wages, questions about the effectiveness of cuts to date and the possible use of nonmonetary measures to tackle surging house prices) will just add more pressure on the RBNZ to cut, most obviously via the currency."
"The same goes for the Fed – the RBNZ would dearly love to see the Fed hike in June, thereby (apparently) giving the USD a boost. But odds of that seem to be fading, and it’s arguable whether it would indeed do all that much to the USD – 0.0% or 0.25% – they’re all still effectively “zero”.
Key Quotes
"As subtle as the difference between these two words are, it’s key, for it is difficult to argue that the RBNZ are poised to ease imminently given their expectation for “inflation to pick up gradually”, even if they have explicitly said they can see a scenario that may warrant cuts."
"As such, while confirmation of the easier bias does validate yesterday’s relief rally in interest rates and notch lower in the Kiwi, what actually happens depends on the data, and on what others do (via the currency channel). With more calls for the RBA to ease (with the latest call by Peter Martin arguing that the AUD resurgence, weaker growth, soft wages, questions about the effectiveness of cuts to date and the possible use of nonmonetary measures to tackle surging house prices) will just add more pressure on the RBNZ to cut, most obviously via the currency."
"The same goes for the Fed – the RBNZ would dearly love to see the Fed hike in June, thereby (apparently) giving the USD a boost. But odds of that seem to be fading, and it’s arguable whether it would indeed do all that much to the USD – 0.0% or 0.25% – they’re all still effectively “zero”.