The Reserve Bank of New Zealand is at 0200 GMT Wednesday, which is 2200 US Eastern time on Tuesday evening.
Earlier previews:
- 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
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.
