Scoop has an Ethical Paywall
RBNZ May Monetary Policy Statement Instant View
Data Flash (New Zealand) NZ:
As widely expected, the
RBNZ left the cash rate unchanged at 5.75%.
The Bank referred to buoyant domestic trading conditions and corresponding upside inflation risks, but also noted that there was a risk of a further deterioration in world economic conditions.
While the RBNZ's central forecast track assumes a re-tightening in the first quarter of next year, the Bank said that a weaker-than-expected global picture and its subsequent impact on NZ could trigger a further series of rate cuts. The alternative scenario printed in the MPS projects the OCR reaching 5.0% during the first half of next year.
In our view, both the RBNZ's central scenario (US recovers, RBNZ re-tightens early) and the alternative scenario (US weak, Fed continues to ease aggressively, RBNZ follows) imply a widening OCR/Fed Funds differential.
The market viewed the statement as relatively hawkish, with both the bill futures and bond market weaker.
Ulf Schoefisch, Chief Economist
Maritime Union of NZ: New Ferry Options
Air New Zealand: Air New Zealand Boosts Capacity To Support CHOGM Delegates Travelling To Samoa
Bill Bennett: A Better Way Of Getting Google To Support NZ Media
Stats NZ: Food Prices Increase 1.2 Percent Annually
Bill Bennett: Download Weekly - Transitions dominate TCF annual report
Electricity Authority: Authority Welcomes Government Policy Statement On Electricity
