ANZ forecasts the RBNZ to raise the cash rate to 5.75% in July

The Reserve Bank of New Zealand OCR is currently 5.25%

ANZ report (in summary):

• We expect the RBNZ will raise the Official Cash Rate (OCR) 25bp to 5.50% at its Monetary Policy Statement (MPS) next Wednesday. We see a 20% chance of a 50bp hike and a 5% chance of a pause. Either could backfire by driving down future OCR expectations.
• We are building one more 25bp hike in July into our own OCR forecast, which would take the OCR to 5.75%. The (relatively) happy place to sit and “watch, worry and wait” keeps inching just out of reach.
• Data since the April Review has been mixed but firmly tilted to the upside overall, in our view. Downside: the CPI inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term starting point, inflation expectations, LCI wages, and global growth. Upside: soaring migration (the biggie), an earlier floor in house prices, a tighter labour market starting point, slipping fixed mortgage rates, and fiscal policy (probably also a biggie – we’ll know more on Thursday – but that’s less ‘new news’ versus the April Review than the migration data is).

Yesterday:

• Westpac forecasts RBNZ will raise cash rate to 6%, keep it there until mid-2024

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The bank meets next week: