RBNZ to deliver a dovish hold – ANZ

According to analysts at ANZ, the wait will soon be over for the much anticipated May Monetary Policy Statement of RBNZ, which is out at 2pm on Wednesday.

Key Quotes

“Since the RBNZ’s dovish shift in guidance at the March OCR review, market pricing has been quite appropriately ebbing and flowing around the 50% mark for a cut in May. More analysts than not are now calling a May cut, but we’re not among them.”

“On balance we expect the Bank to deliver a dovish hold, presenting a downward-sloping OCR track and firming up its language around the likely impending need for additional monetary stimulus.”

“By August, we think the evidence that slowing economic momentum and waning capacity pressures will be sufficiently strong for the RBNZ to cut the OCR, but we certainly wouldn’t rule out that they’ll decide to bite the bullet next week. It’s a nail-biter. There’s also three ANZ proprietary indicators and another GlobalDairyTrade auction out this week.”