RBNZ expected to remain on hold this week – UOB
Researchers at UOB Group expect the RBNZ to keep the key rate on hold at this week’s meeting.
“NZD spent much of the past week clawing back losses that had dominated the currency’s price action over the past few weeks after New Zealand’s employment data beat expectations. This Thursday’s Reserve Bank of New Zealand (RBNZ)’s meeting would be interim RBNZ Governor Grant Spencer’s first full monetary policy statement, and this also happens to be the first RBNZ rate decision under the new Labour-led government”.
“There are no expectations for any moves on rates, and for the next expected adjustment, markets are currently looking out to 4Q18 for a potential hike”.
“The one possible area for change is an adjustment to inflation expectations in order to account for the weaker currency. In Graeme Wheeler’s final press conference as the head of the bank in August, the RBNZ said that they anticipate rates staying on hold until at least September of 2019”.
“Since then, we’ve seen inflation come-in at 1.9% versus the RBNZ’s projection of 1.6%, and the additional slide in NZD will likely necessitate a small adjustment for forward-looking inflation figures. NZD traders will also be keeping an eye on the GDT dairy auction on Tuesday”.