RBNZ Preview: Looking for signs about further rate cuts – Wells Fargo

Next week, the Reserve Bank of New Zealand will have its monetary policy meeting. Market consensus sees a 25bps rate cut. According to analysts at Wells Fargo it will be relevant to watch what the RBNZ signals about the future. 

Key Quotes: 

“The Reserve Bank of New Zealand held its official Cash Rate at 1.00% at its last monetary policy meeting, following its moreaggressive-than-expected 50 bps rate cut in August. In the accompanying statement the central bank noted that there remains further scope for additional stimulus, if necessary. Meanwhile, RBNZ Governor Orr said the central bank was pleased with the outcome of its August easing to date and that it was unlikely to need “unconventional” monetary policy tools.”

“Given that activity data and confidence surveys have remained subdued, markets are leaning toward a November rate cut, with markets currently implying around a two-thirds chance of a rate cut at next week’s meeting. That said, even if the central bank opts to leave rates on hold next week, it will be important to watch whether the central bank signals further rate cuts ahead.”