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4 Feb 2015
What to expect from RBNZ Wheeler speech? - BNZ
FXStreet (Bali) - Reserve Bank Governor Graeme Wheeler will be giving an on-the-record speech to the Canterbury Employers’ Chamber of Commerce on Wednesday 4 February 2015, due at 00 GMT, with BNZ Economists noting that the RBNZ Governor is expected to reiterate his stance that there is no reason to be contemplating rate increases for now.
Key Quotes
"Most attention will be on Wheeler’s on-the-record speech to the Canterbury Employers’ Chamber of Commerce. Wheeler will commence his speech at 1.00pm NZT. The full speech and press statement will be released by the RBNZ and media at this time. Given the surprising dovishness of the RBNZ at its January OCR review, there will be more than usual interest in this speech as it provides the opportunity to put flesh on the bones provided in that OCR review."
"We would expect Wheeler to trawl through the various issues currently confronting the New Zealand economy and reiterate his stance that there is no reason to be contemplating rate increases given that the economy is currently in a broadly deflationary phase. What will be really interesting for markets are any clues as to the probability that the RBNZ might actually lower interest rates. We think that probability is low and certainly much lower than the 90% chance (by year’s end) that the market is currently pricing in."
"We continue to maintain that the combination of excess domestic demand and the falling currency mean that the probability of a rate hike in the next twelve months is substantially greater than a cut. We’ll get more information on the state of the domestic economy with Wednesday’s employment data but today’s 4c/l increase in petrol pump prices is a reminder that the falling New Zealand dollar will feed through into the domestic price structure relatively quickly."
Key Quotes
"Most attention will be on Wheeler’s on-the-record speech to the Canterbury Employers’ Chamber of Commerce. Wheeler will commence his speech at 1.00pm NZT. The full speech and press statement will be released by the RBNZ and media at this time. Given the surprising dovishness of the RBNZ at its January OCR review, there will be more than usual interest in this speech as it provides the opportunity to put flesh on the bones provided in that OCR review."
"We would expect Wheeler to trawl through the various issues currently confronting the New Zealand economy and reiterate his stance that there is no reason to be contemplating rate increases given that the economy is currently in a broadly deflationary phase. What will be really interesting for markets are any clues as to the probability that the RBNZ might actually lower interest rates. We think that probability is low and certainly much lower than the 90% chance (by year’s end) that the market is currently pricing in."
"We continue to maintain that the combination of excess domestic demand and the falling currency mean that the probability of a rate hike in the next twelve months is substantially greater than a cut. We’ll get more information on the state of the domestic economy with Wednesday’s employment data but today’s 4c/l increase in petrol pump prices is a reminder that the falling New Zealand dollar will feed through into the domestic price structure relatively quickly."