RBNZ: August rate cut more likely - BNZ

Kymberly Martin, Senior Market Strategist at BNZ, suggests that the market has moved closer to pricing their view that the RBNZ will cut the OCR to 2.0% on 11 August.

Key Quotes

“It now prices a 75% chance of a cut. Recent PSI and CPI releases (0.4%y/y) re-illustrated an enduring theme. The NZ economy is strong but is struggling to create CPI inflation. Low tradable sector inflation remains a key part of the story. In turn this is not being helped by the resilient NZ TWI dampening import costs. In our view, this CPI data removes the final potential barrier to the RBNZ outlining these concerns at its intra-meeting update on Thursday.”