– RBNZ sounding, looking, less relaxed
– Lifting OCR track 50bps, first hike by June
– LVR policy “worth” 30bps in RBNZ eyes
– Data could be mixed, near term
– But watch for problematic rebound in TWI
– We stick to March hike, +200bps OCR cycle
We commend the Reserve Bank for sounding less relaxed at this morning’s Monetary Policy Statement (MPS). In doing so it has acknowledged at least some of the broad inflation risk we see, as the economy builds a veritable head of steam. We just didn’t expect the Bank to give up the extent of ground it did, at this particular Statement.
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