A brief summary of the Reserve Bank of New Zealand preview from ANZ, Anz expect the RBNZ to hold rates at the August 14 meeting, but signal potential cut later this year
- ANZ expects RBNZ to keep OCR at 5.50% next week
- Bank sees potential for RBNZ to signal OCR cut later in 2024
- Recent data points to slowing economy and solid disinflation progress
- ANZ puts 10-15% odds on RBNZ switching to easing bias at this meeting
- Non-tradable inflation still high at 5.4% y/y vs RBNZ's 4.1% expectation
- Q2 labor market data stronger than RBNZ expected overall
- Markets pricing in 89bp of cuts by November 2024 and 222bp by November 2025
- ANZ warns of potential market disappointment if RBNZ holds steady
- Bank sees upside risks for NZD on any repricing of rate cut expectations
Key takeaway: While recent data supports earlier rate cuts, ANZ thinks RBNZ will likely wait for more evidence before easing policy. Markets appear overly dovish heading into the meeting.
