RBNZ preview: Westpac see July 8 rate hold. Tightening cycle still in effect, pared back
From the original
A lower projected OCR peak and a softer tightening path than Westpac had pencilled in only a few months ago is a moderately dovish revision for rates markets, even as the bank still expects two further hikes between September and December. The call for a low-drama, possibly unani
Related speeches
4 itemsRBNZ preview: Westpac see July 8 rate hold. Tightening cycle still in effect, pared back - investingLive
RBNZ preview: A closer call than markets expect
The desk anticipates a potential interest rate hike at the Reserve Bank of New Zealand's upcoming meeting on May 27, although it acknowledges that the RBNZ's tendency towards dovishness may lead to a 'hawkish hold'. Per the full note from ing-think, there is an underappreciated risk of tightening, with expectations suggesting the first of two hikes could occur as early as July. With external factors likely to drive NZD movements, market participants should remain vigilant. Supporting arguments for a hike include evolving inflation data suggesting underlying pressures and a global economic recovery, particularly as the RBNZ has previously suggested readiness to act if necessary. As such, new projections could indicate a tightening cycle starting in Q3, reflecting a shift in the central bank's stance. While the desk leans towards anticipating these hikes, it implicitly dismisses the counter viewpoint that favors a prolonged period of policy accommodation—arguing instead that inflationary pressures are likely to prompt action sooner rather than later.