RBNZ: Patient, amid mixed messages – Nomura

Andrew Ticehurst, Research Analyst at Nomura, notes that the Reserve Bank of New Zealand (RBNZ) today announced an unchanged cash rate, at 1.75%, as was uniformly expected.

Key Quotes

“We see mixed messages on growth and inflation, but note less near-term momentum and more spare capacity, and more dovish forward guidance.”

“We remove our forecast for a 25bp increase in the official cash rate (OCR) in Q3 2019, leaving a single 25bp hike in Q4 2019.”

“Our AUD and NZD forecasts have implied AUD/NZD at around 1.10-1.11; we now see a risk of this trading a little higher, to around 1.12-1.13.”