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9 Nov 2015
NZD: Chances of RBNZ rate cut in December are on the rise – Westpac
FXStreet (Delhi) – Imre Speizer, Senior Markets Strategist at Westpac, suggests that the developments over the past week have shifted the balance further in favour of a December cut by RBNZ, but it’s still not a done deal.
Key Quotes
“It’s been just over a week since the RBNZ’s October interest rate decision. At that time, the RBNZ kept the OCR on hold at 2.75% and reiterated that some further easing was likely. However, they noted that the timing of any further easing would be dependent on the flow of data.”
“First, the latest update on the labour market showed a loss of momentum in economic activity, and that the economy is operating with some spare capacity. Second, we’re still looking at some tough times in the dairying industry. Third, while house sales in Auckland have declined, there’s been no clear impact on the trend in house prices thus far. Finally, stubbornly low wage growth has reinforced the picture of soft domestic inflation.”
“Putting it altogether, we’re left with a picture of an economy that has been losing momentum, and where domestic inflation remains low. At this stage, a December rate cut is certainly looking more likely than not, but there’s still a way to go before then.”
Key Quotes
“It’s been just over a week since the RBNZ’s October interest rate decision. At that time, the RBNZ kept the OCR on hold at 2.75% and reiterated that some further easing was likely. However, they noted that the timing of any further easing would be dependent on the flow of data.”
“First, the latest update on the labour market showed a loss of momentum in economic activity, and that the economy is operating with some spare capacity. Second, we’re still looking at some tough times in the dairying industry. Third, while house sales in Auckland have declined, there’s been no clear impact on the trend in house prices thus far. Finally, stubbornly low wage growth has reinforced the picture of soft domestic inflation.”
“Putting it altogether, we’re left with a picture of an economy that has been losing momentum, and where domestic inflation remains low. At this stage, a December rate cut is certainly looking more likely than not, but there’s still a way to go before then.”