RBNZ: Hike 100% priced in by August 2018 - Westpac
|Market pricing for the RBNZ has been fairly stable during the past week, with a hike 100% priced in by August 2018, notes Imre Speizer, Research Analyst at Westpac.
Key Quotes
“We are less optimistic, expecting the OCR to remain unchanged through next year. The RBNZ’s policy prescription remains the same: the economy needs to be allowed to continue to grow and gradually use up its spare capacity, in order for inflation to settle around the 2% target midpoint on a sustained basis. And that means keeping interest rates at low levels for an extended period.”
“As the RBNZ starts to prepare its August Monetary Policy Statement, recent developments have generally been on the soft side: inflation was lower than forecast, the NZD has strengthened, and the housing market is cooling down much faster than the RBNZ expected.”
“If the RBNZ was “firmly neutral” in its last review, it is hardly going to be mulling the timing of interest rate hikes this time around.”
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