We expect the RBNZ to leave the OCR on hold at 2.5% at the July 25 OCR Review, and there is unlikely to be much change to the central bank’s outlook relative to the June Monetary Policy Statement (MPS). We continue to expect the RBNZ will first lift the OCR in March 2014. Market pricing already has the OCR ending 2014 slightly higher than our 3.25% forecast. That pricing effectively factors in some risk that housing concerns or imported inflation prompt more aggressive OCR increases.
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Commonwealth Bank