RBNZ Preview: Forecasts from five major banks, more worries, more waiting


The Reserve Bank of New Zealand (RBNZ) will announce its Interest Rate Decision on Wednesday, October 4 at 01:00 GMT and as we get closer to the release time, here are the expectations as forecast by the economists and researchers of five major banks.

The RBNZ is expected to hold the key Official Cash Rate (OCR) steady at 5.50%. At the last meeting, the bank kept the interest rate unchanged but it was a hawkish hold. Traders will keep an eye on the statement following the meeting.

ANZ

We expect the RBNZ to keep the OCR unchanged at 5.5% while striking a more hawkish tone. Data since the August Monetary Policy Statement (MPS) has overall been stronger than anticipated, dairy prices aside. Potential wealth effects from the reheating housing market are concerning. We continue to expect a hike at the November meeting and risks are tilting towards even more being required in 2024.

TDS

We expect the RBNZ to stay on hold though data since the August meeting adds support to inflation remaining elevated for longer. The question now is whether the Bank is re-assessing the balance of risks around inflation or sticking with the lagged impacts of rate hikes still to filter through. We are not expecting a more hawkish shift but we are on the lookout for it. Would a hawkish RBNZ statement inspire a NZD comeback? For now, the NZD is closely tied to factors such as risk sentiment and US 10Y real yields. Our expectation of a marked deterioration in US data in the months ahead should take the tailwind away from the USD and could benefit the NZD. 

Westpac

We think the RBNZ will keep the OCR at 5.50% at its October review. We expect the RBNZ to retain the tightening bias expressed in the August Statement and will aim to retain maximum flexibility to tighten (or not) in November should data warrant. A surprise tightening to 5.75% is a risk, but we think no more than a 10-20% chance. 

Citi

The RBNZ is unlikely to raise interest rates again. However, risks are tilted squarely hawkish.

Wells Fargo

While a further moderation in growth trends and inflation pressures seems possible over time, it appears far too early yet for the RBNZ to contemplate monetary policy easing. Accordingly, we look for the RBNZ to keep its policy rate steady at 5.50%.

 

Share: Feed news

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD keeps range below 1.0750 ahead of US data, Fedspeak

EUR/USD keeps range below 1.0750 ahead of US data, Fedspeak

EUR/USD is consolidating its mild recovery below 1.0750 in the European session on Tuesday. Risk flows remain and exert additional downside pressure on the US Dollar while Euro traders reposition ahead of Sunday's French election. Mid-tier US data and Fedspeak are on tap.

EUR/USD News

GBP/USD recovers to 1.2700 as US Dollar weakness extends

GBP/USD recovers to 1.2700 as US Dollar weakness extends

GBP/USD is recovering to test 1.2700 in the European morning on Tuesday. Extended US Dollar weakness due to improved market mood, aids the pair's latest uptick. Traders look to the US sentiment data and Fed speeches for further impetus, as the UK calendar remains data-quiet. 

GBP/USD News

Gold moves within familiar territory as traders await further cues

Gold moves within familiar territory as traders await further cues

Gold (XAU/USD) trades in familiar territory in the $2,320s on Tuesday, amid a subdued market mood after a mixed session for Asian stocks and investor loss of appetite for tech stocks on Monday. 

Gold News

Bitcoin breaks below descending wedge, finding support on key level

Bitcoin breaks below descending wedge, finding support on key level

Bitcoin spot ETFs record a $174.5 million outflow on Monday, marking seven consecutive days of continuous decline. Mt.Gox announces Bitcoin and Bitcoin Cash repayment to creditors in July.

Read more

Canada CPI Preview: Inflation expected to continue easing in May

Canada CPI Preview: Inflation expected to continue easing in May

The Canadian CPI is expected to rise at an annual rate of 2.6% in May, a tad slower than a 2.7% increase in April. On a monthly basis, the CPI inflation is seen easing to 0.3% in the same period after April’s 0.5% growth. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures