Analysts at ANZ Bank New Zealand Limited explained that the main focus for the AUD/NZD this week is the central bank showdown.
Key Quotes:
“The RBA is first up this afternoon, while the RBNZ will give its take Thursday morning. ANZ Research expects the RBA to keep its growth and inflation forecasts broadly unchanged.”
“The economy is evolving much as expected, with the RBA forecast that GDP will “average a bit above 3 percent in 2018 and 2019″.”
“However, the RBA may have been mildly disappointed with the soft tone of the Q2 CPI report. When it comes to the RBNZ, things are flipped: Q2 CPI inflation was a little stronger than anticipated, but the risks to the growth outlook are clearly to the downside.
It comes out in the wash; we expect the RBNZ’s key OCR forecast to be little changed, though it remains to be seen how much of the growth downside goes into the forecast track and how much is parked in the “risks” section of the document. Over the ditch, the accelerating slowdown in the Australian housing market will certainly warrant a mention in the risks discussion.””
“All up, the RBA is expected to strike a modestly less dovish tone than the RBNZ, although that has been the case for a while admittedly. But with a complex set of risks in each country, there’s likely to be something for everyone.”
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