RBNZ to keep OCR on hold until next year - ANZ
|According to the analysts at ANZ, stronger than expected Q1 CPI print of NZ has understandably led to increased debate around the appropriateness of the RBNZ’s neutral stance.
Key Quotes
“We remain comfortable with their view of the OCR on hold until next year, with global uncertainties, mandate uncertainty, tighter credit conditions, two false tightening cycles in recent years, and the lack of broad based inflation pressures all flagging a high hurdle to kick off another tightening cycle. Against this backdrop, we expect any lift in short end rates to be bought/ received into.”
“New Zealand long end rates remain inextricably linked to US rates, which continue to edge lower and are now in a new trading range. Absent a break back through the key 2.3% level in US 10 year Treasuries, with the US data pulse softening abruptly, it’s difficult to envisage US bond yields rising too far for now. Increased talk of delayed Fed hikes is having a dampening impact, as are geopolitical risks.”
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