RBNZ: Little reason to see any reassessment this week – AmpGFX

There has been no new labour market or inflation data since the previous RBNZ policy meeting on 11 May and analysts at Amplifying Global FX Capital suggest that there is little reason to see any reassessment this week.

Key Quotes

“Leading into May meeting, many were speculating that the RBNZ might bring forward its forecast for policy tightening after higher than expected inflation data in Q1.  Instead, the RBNZ went out of its way to downplay the data.  There is little reason to see any reassessment this week.”

“However, there is some evidence from stronger business surveys that inflation pressure is building more than the RBNZ’s May assessment.  The RBNZ would have been able to view most of the increase before its May meeting, only the last data-point for May came after the previous RBNZ meeting.”

“Overall business survey data suggests the NZ economy continues to operate at an above trend level.  Consumer confidence also remains robust.  However, the most recent job ads data do show some cooling.”

“On balance, there is little reason for the RBNZ to make any substantive change to their rates outlook in the policy meeting this week.  It is likely to conclude again that, “Monetary policy will remain accommodative for a considerable period. Numerous uncertainties remain and policy may need to adjust accordingly.”