RBNZ Preview: Forecasts from five major banks, more worries, more waiting
|The Reserve Bank of New Zealand (RBNZ) will announce its Interest Rate Decision on Wednesday, October 4 at 01:00 GMT and as we get closer to the release time, here are the expectations as forecast by the economists and researchers of five major banks.
The RBNZ is expected to hold the key Official Cash Rate (OCR) steady at 5.50%. At the last meeting, the bank kept the interest rate unchanged but it was a hawkish hold. Traders will keep an eye on the statement following the meeting.
ANZ
We expect the RBNZ to keep the OCR unchanged at 5.5% while striking a more hawkish tone. Data since the August Monetary Policy Statement (MPS) has overall been stronger than anticipated, dairy prices aside. Potential wealth effects from the reheating housing market are concerning. We continue to expect a hike at the November meeting and risks are tilting towards even more being required in 2024.
TDS
We expect the RBNZ to stay on hold though data since the August meeting adds support to inflation remaining elevated for longer. The question now is whether the Bank is re-assessing the balance of risks around inflation or sticking with the lagged impacts of rate hikes still to filter through. We are not expecting a more hawkish shift but we are on the lookout for it. Would a hawkish RBNZ statement inspire a NZD comeback? For now, the NZD is closely tied to factors such as risk sentiment and US 10Y real yields. Our expectation of a marked deterioration in US data in the months ahead should take the tailwind away from the USD and could benefit the NZD.
Westpac
We think the RBNZ will keep the OCR at 5.50% at its October review. We expect the RBNZ to retain the tightening bias expressed in the August Statement and will aim to retain maximum flexibility to tighten (or not) in November should data warrant. A surprise tightening to 5.75% is a risk, but we think no more than a 10-20% chance.
Citi
The RBNZ is unlikely to raise interest rates again. However, risks are tilted squarely hawkish.
Wells Fargo
While a further moderation in growth trends and inflation pressures seems possible over time, it appears far too early yet for the RBNZ to contemplate monetary policy easing. Accordingly, we look for the RBNZ to keep its policy rate steady at 5.50%.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.