RBNZ to keep the cash rate at 2% this Thursday with an easing bias - TDS

Research Team at TDS, notes that the NZIER’s Monetary Policy Shadow Board recommend the RBNZ keep the cash rate at 2% this Thursday with an easing bias.

Key Quotes

“The Shadow Board expects further easing is likely given inflation is the primary focus. We expect the RBNZ to reiterate that “further policy easing will be required…” but for the Bank to refrain from using ‘unjustified and unsustainable’ to characterise the NZD.

NZ Farmer Confidence rose to a 3 year high, with net 35% of farmers surveyed this month expecting the rural economy to improve in the next 12 months. Dairy farmers are the most positive, 67% seeing improvement, the most since Oct 2007. No doubt the sharp receiver in milk prices has helped bolster confidence.

Ahead of GDT auction tonight, the second milk futures contracts is up around 2% since the last auction, so we expect a strong outcome in line with this.”