Analysts at TD Securities (TDS) offer their views on the Reserve Bank of New Zealand (RBNZ) monetary policy outlook and the NZD.
Key Quotes:
“RBNZ dicing With Financial Stability, with housing credit ‘upbeat’ while a ‘leap’ in high LVR loans ‘could threaten future financial stability ‘.
Healthy mortgage growth via high LVR loans should mitigate any appetite for OCR cuts, even if inflation is lingering below target for too long.
We remain more constructive on the economy than the RBNZ and consensus, even though we recently pushed back the timing of the first OCR hike to November 2019
While CFTC net shorts are near extremes for the NZD, we cannot see the NZD breaching the 50d MA of $US0.675 with the RBNZ talking up the risk of a rate cut at each opportunity (including on the sidelines in Jackson Hole).”
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