August 14, 2024 at 01:26AM
The Reserve Bank of New Zealand is at 0200 GMT Wednesday, which is 2200 US Eastern time on Tuesday evening.
Earlier previews:
Reserve Bank of New Zealand meet today – BNZ calls for an immediate rate cut
RBNZ monetary policy meeting – Reuters poll is not clear cut, 19 say hold, 12 say 25bp cut
ANZ forecast the RBNZ to remain on hold next week, signal a rate cut later in the year
NZD traders – Westpac forecasts the RBNZ to cut by 25bps in October and November 2024
New Zealand – RBNZ shadow board split on Reserve Bank interest rate cut
Reuters have pooped up a piece on what’s to come, outlining the points in favour of a hold, and a cut:) –
expected to leave its official cash rate (OCR) at 5.5% while paving the way for an easing in October
but a
cut would not surprise given softening inflation, slowing growth
and the central bank’s propensity to up-end expectations
Comparing market pricing and analyst expectations:
swaps imply a 75%
probability of a 25 basis-point cut today & 85 bps of cuts by year-end
economists majority, about 60% polled by Reuters,
expecting no change today
We are heading into the meeting with
NZ inflation at three-year low of 3.3% in Q2, still above the 1-3% target band.
an RBNZ survey last week showing inflation expectations falling
to three-year lows in Q3
stickiness in non-tradeable
inflation
expectations for the economy to slow markedly from Q1’s 0.2% growth (Reuters cite WAPC expecting GDP contractions of
0.6% in Q2 and 0.2% in Q3)
rising unemployment
annual wage
growth at a two-year low
also support an easing.
If the RBNZ do not cut today, the Bank will provide dovish guidance
by lowering its OCR forecasts.
Victor didn’t make this meme for no reason. RBNZ Governor Orr is da man when it comes to action.
This article was written by Eamonn Sheridan at www.forexlive.com.