Today will be all about the RBNZ’s August MPS - ANZ
|Analysts at ANZ explained that today will be all about the RBNZ’s August MPS.
Key Quotes:
"We expect that the RBNZ will reiterate its previous neutral messaging, saying that the next move could be “up or down” – or words to that effect."
"However, our base case is that the OCR track will be little changed, with eventual increases late in the projection. In some ways, this difference between messaging and projection presents an awkward tension."
"But in our view it simply reflects a distinction between forecasting and policy strategy. The OCR projection is based on a set of assumptions that could (and will) prove to be wrong – such is the nature of forecasting."
"On the other hand, the RBNZ’s neutral messaging is about caution in light of uncertainty, sending the clear message that the RBNZ is willing to do whatever is necessary should developments change. We expect this caution to be a continued theme of today’s MPS in light of recent events."
"The outlook for activity is weaker, but the outlook for CPI inflation is stronger."
"We expect that the RBNZ will “look through” temporary movements in CPI inflation; instead focusing on the trend in inflation provided inflation expectations remain anchored – which yesterday’s figures show they are. Core inflation has been creeping up, but remains below target and is expected to increase only gradually from here. This speaks to a world where wait-and-see remains the best approach."
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