RBNZ: August rate cut coming - Westpac

Imre Speizer, NZ Market Strategist at Westpac, notes that the RBNZ held the OCR steady at 2.25% in June, in line with Westpac’s forecast.

Key Quotes

“But the guidance from RBNZ governor Wheeler - “Monetary policy will continue to be accommodative. Further policy easing may be required to ensure that future average inflation settles near the middle of the target range. We will continue to watch closely the emerging flow of economic data.” – plus interest rate projections indicated one more rate cut.

Since then the housing market has remained strong, causing markets to price only a 50% chance of a cut in August, but 100% by year end. Westpac forecasts an Aug cut, arguing the strong NZD dominates the heated housing market.”