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Analysts at Westpac explained that with the Reserve Bank’s dual employment and inflation mandate now firmly in place and labour market data will also form an important part of the deliberations ahead of the Monetary Policy Statement released on the 9th of August.  

Key Quotes:

“For the record, we think it’s extremely unlikely that any surprises in the labour market data will be enough to shift the Bank from  its  on hold “for some time to come” stance. While inflation pressures are rising, most notably with non-tradable inflation printing above the RBNZ’s forecasts in Q2, and measures of core inflation edging higher, rising inflation pressures are being largely offset by slower growth.”

“GDP grew 0.4% in the March quarter, well short of the RBNZ’s 0.7% forecast while their 0.8% forecast for Q2 also looks too optimistic to us. Given these broadly offsetting developments, the RBNZ is unlikely to be hurried into action any time soon. We maintain our view that it will be the final quarter of 2019 before the RBNZ raises the OCR.”