RBNZ: Markets have priced a November OCR cut - Westpac

Imre Speizer, Research Analyst at Westpac, suggests that the markets have priced a November OCR cut again, after the RBNZ affirmed its explicit easing bias at yesterday’s OCR Review.

Key Quotes

“From around a 50% chance ahead of the announcement, it is now at a 72% chance. The RBNZ noted the main developments since the previous meeting in August, namely stronger economic growth and higher dairy prices; but also a higher exchange rate, early signs of cooler housing, and very low inflation. It left the impression that in net terms, there was nothing to warrant a change in policy outlook.

Indeed, the policy guidance paragraph was left completely intact, retaining the key phrase: “further easing will be likely.” We remain comfortable with our forecast of one more cut on 10 November followed by a lengthy on-hold period.”