BNZ summarise their reasoing:
QSBO just awful
CPI headed sub 2.0%
Soft labour market to subdue non-tradables
Rate settings need to move quickly towards neutral
50 basis point cut at October meeting warranted
“In our opinion, we think the disinflationary information
that we have received will dominate and that this will,
ultimately, encourage the RBNZ to accelerate the easing
process.”
BNZ also outline the arguments against a 50bp rate cut:
the strength in the ANZ surveythe fact that Q2 GDP surprised to the upside with activity
levels now 0.2% higher than anticipated and private
consumption 1.3% above expectationsongoing elevation in non-tradables inflation an increase in confidence in the housing marketconcern that an acceleration might be criticised by some
as another RBNZ change in view concern that current market pricing for future rate cuts is
overdone
NZD/USD has dribbled lower on the session, currently around 0.6330.
***
RBNZ meet October 9:
This article was written by Eamonn Sheridan at www.forexlive.com.
