The big question for Thursday’s Monetary Policy Statement (MPS) is how much ground the RBNZ will cede to the stronger economic pointers and market pricing we’ve seen over recent months. Not that much, we suspect is the answer. The June MPS signalled no OCR increase until Q3 of next year. The market now sees at least 75bps by then, involving a first hike fully priced for March. While this is close to the cash rate trajectory we’ve kept with since early-2013, we can’t imagine the RBNZ will encourage this view at this particular juncture.
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