ASB on the Reserve Bank of New Zealand announcement earlier today

Summary:

  • We didn't expect much change in wording in the statement, and there wasn't. The key message is the RBNZ has maintained its neutral stance along with keeping interest rates on hold.
  • But there is a hint that the RBNZ has nudged its growth outlook down slightly, particularly given how weak construction has been despite strong demand. How significant any changes are will have to wait for the full projections in the November Monetary Policy statement. But it is also quite possible the election outcome eventually brings about more fiscal stimulus than the Budget 2017 scenario the RBNZ will still be using. Even with some potential shaving of its growth outlook, the RBNZ still appears comfortable with the balance of inflation risks.
  • So, as per usual, uncertainties remain. Could near-term growth end up slightly weaker, particularly if there is some election-related uncertainty? Could medium-term growth get a touch more fiscal support? What is pretty certain is the RBNZ doesn't need to do anything for a while, until 2019 in our view.

Bolding mine, something to watch ahead

---