10 Jul 2015
RBNZ: Further rate cuts imminent - ANZ
FXStreet (Bali) - Cameron Bagrie, Chief Economist at ANZ, reviews NZ monthly inflation gauge, which posted a 0.1% increase in June, after declines in April and May, noting that low inflation and sub-trend growth mean additional OCR cuts are imminent.
Key Quotes
"Prices in the housing group rose 0.2%, with our Underlying Ex-housing Gauge flat for the month (and also flat in the three months to June)."
"On a three month basis, our Monthly Inflation Gauge is up just 0.1% and points to a low Q2 non-tradable print in the official CPI figures next week."
"Low inflation and sub-trend growth mean additional OCR cuts are imminent."
"Last year’s OCR hikes are now being reversed. With inflation low, the economy growing at a below-trend pace, the NZD only now catching up to commodity price falls, and global risks evident, further monetary policy action is warranted. We see the RBNZ eventually returning the OCR to 2.5%."
Key Quotes
"Prices in the housing group rose 0.2%, with our Underlying Ex-housing Gauge flat for the month (and also flat in the three months to June)."
"On a three month basis, our Monthly Inflation Gauge is up just 0.1% and points to a low Q2 non-tradable print in the official CPI figures next week."
"Low inflation and sub-trend growth mean additional OCR cuts are imminent."
"Last year’s OCR hikes are now being reversed. With inflation low, the economy growing at a below-trend pace, the NZD only now catching up to commodity price falls, and global risks evident, further monetary policy action is warranted. We see the RBNZ eventually returning the OCR to 2.5%."