12 Nov 2015
RBNZ: 40% chance of rate cut in Dec? - Too low - Westpac
FXStreet (Guatemala) - Sean Callow, analyst at Westpac noted that the RBNZ cut the OCR three times from Jun to Sep, to 2.75%. But policy was kept steady on 29 Oct, with Governor Wheeler noting “robust” growth in construction and services.
Key Quotes:
"The statement also included a view that it was best to “watch and wait.” But there was stronger concern about a resilient NZD TWI and Wheeler reiterated that given very low inflation, “some further reduction in the OCR seems likely.”
"We see October as having been only a brief pause in the easing cycle. There are emerging signs of weakness in Auckland housing, while dairy prices have softened once more. Markets are pricing just a 40% chance of a rate cut in Dec , which looks far too low to us."
Key Quotes:
"The statement also included a view that it was best to “watch and wait.” But there was stronger concern about a resilient NZD TWI and Wheeler reiterated that given very low inflation, “some further reduction in the OCR seems likely.”
"We see October as having been only a brief pause in the easing cycle. There are emerging signs of weakness in Auckland housing, while dairy prices have softened once more. Markets are pricing just a 40% chance of a rate cut in Dec , which looks far too low to us."