More on BNZ lowering their Reserve Bank of New Zealand terminal rate forecast

The data from NZ earlier today is here:

• New Zealand jobs report for Q4 2022: Unemployment rate 3.4% (expected 3.3%)
• NZD/USD drops a few points after the New Zealand jobs market report

BNZ response:

• BNZ now expects the RBNZ cash rate to peak at 5% (vs. 5.5% prior forecast)

A little more now from the BNZ note, this in summary hitting the main reasoning:

• Today’s labour market data were not as strong as we had expected. More importantly, they weren’t as robust as the RBNZ had anticipated. The RBNZ has been reacting strongly to starting point surprises. We think the combination of the weaker-than-anticipated inflation and softer-than-expected labour market data should, from a consistency perspective, result in the Bank moderating its interest stance. Accordingly, we now believe the RBNZ will raise its cash rate by 50 basis points at its February 22 Monetary Policy Statement rather than the 75 we were picking prior to the labour data release.

BNZ do say though that the RBNZ is

• Not out of the woods yet

RBNZ meetings ahead: