Thursday’s RBNZ OCR Review is “live” for a rate hike. The economic rationale for it is overwhelming, in our view. Be that as it may, we still come down on the side of Governor Wheeler adhering to his December MPS word; that he would leave any first increase in the cash rate until March/April, at the earliest. We don’t believe the net weight of evidence and news has been strong enough to shift the Bank’s mind all the way into January to gets its stimulus removal process underway. Where we would be most disappointed, and critical, of the Reserve Bank, though, is if it fails on Thursday to strongly signal a rate hike at the 13 March MPS and the upside potential to the OCR more generally.
Read the full report: Market Research
BNZ