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.”
Author
Sandeep Kanihama
FXStreet Contributor
Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.
