RBNZ: OCR to remain at 1.75% tomorrow - TDS
|Analysts at TD Securities points out that the RBNZ decides on the Official Cash Rate (OCR) tomorrow and TD and unanimous consensus expect the OCR to remain at 1.75%.
Key Quotes
“Since the 9 August Monetary Policy Statement, activity has been upbeat - especially Q2 GDP growing at twice the rate the Bank expected - but we expect Governor Orr to emphasise that inflation remains persistently low, and weak business sentiment is the main downside risk to the outlook.”
“TD and unanimous consensus expect the OCR to remain at 1.75% tomorrow. We expect the tone to reflect that the Governor will "wait, watch and worry", where the next move in the cash rate could be “up or down” as per the August policy assessment. We also expect a repeat where “we expect to keep the OCR at this level ... into 2020”. Dropping this latter statement would be undeniably hawkish, and is highly unlikely.”
“Some reduction in the global risk premium is expected to benefit currencies such as the NZD. And as the kiwi is at our high-frequency fair value, we favour a squeeze in positioning and continue to look for a push towards $US0.68 in the immediate future. Governor Orr will ensure that this will not occur in a straight line.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.