Analysts at ANZ explain that the November MPS struck a more upbeat tone, with the RBNZ moving firmly back to a neutral stance with the risk profile balanced, rather than skewed to the downside.
Key Quotes
“The RBNZ now sees the medium term for non-tradable inflation as more assured, and accordingly, the market has now priced out the possibility of OCR cuts.”
“We remain a little more circumspect and are comfortable with our call that the OCR will remain on hold for the foreseeable future, compared with the RBNZ’s projection for eventual increases. That said, looking through potential noise, a considerably stronger labour market starting point suggests that the economy has moved into stretched territory. This makes us also a little more upbeat on the apparent resilience of the economy.”
“We have revised up our forecast a little, but a sustained return to the target is not yet a given. Evidence of broad-based inflation pressures remains scant and a number of growth headwinds remain.”
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