HiFX Data Update - RBNZ Gov post-OCR press conference

HiFX Data Update - RBNZ Gov post-OCR press conference

The Reserve Bank Governor Graeme Wheeler has just delivered his post-OCR decision press conference:

His key points mentioned are:
The NZ economy is growing well
RBNZ has adopted ‘a very neutral bias’ (removed easing bias)
Biggest global risk is protectionist policies
House price inflation has shown major slowdown
Increased housing supply is welcome, more needed
Encouraged by Govt’s response to proposed ‘debt-to-income’ mortgage restrictions
Pleased short-term inflation expectations are rising
Long term inflation expectations well anchored
Consumption growth has been stronger than expected
Wage price growth low due to sluggish productive growth and expanding labour force participation
RBNZ would like to have the DTI (debt-to-income) in the tool kit already, but may not have utilized it yet.
Market is a bit ahead of itself in pricing 2017 hike
If house price inflation started to pick up again, linked to strong migration flows, then the RBNZ would 'certainly be looking at macroprudential tools'.
The NZD is little changed in response to the press conference (although the currency did fall sharply on the release of the OCR decision and related Monetary Policy Statement).

Current indicative levels are:

NZD-USD 0.7245 / 0.7270
NZD-AUD 0.9490 / 0.9515
NZD-EUR 0.6775 / 0.6800
NZD-GBP 0.5775 / 0.5800
NZD-JPY 81.15 / 81.40

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