Comments from NAB client note today

via Bloomberg:

  • RBNZ's monetary stance is a "conditional" easing bias
  • "We are especially leery of calls for near-term OCR cuts" ... says that market pricing of an almost 50% chance of a 25 bp cut by June and a full 25 bp cut by Sept. as too rich
  • NAB says the Reserve Bank of New Zealand's use of the word "settle" in the April policy statement indicates a period of assessment is necessary before changing the Official Cash Rate

NAB unconvinced prices and wages will continue to trend lower

  • Cite rising petrol price ... pump prices rising 15% in past month
  • Expects CPI inflation to rise from 0.1% y/y in 1Q to 0.5% y/y in Q2

Acknowledges a dovish RBNZ is working in favor of NAB's NZD/USD forecast of 0.70 by year-end

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NZD a few points up: