MNI RBNZ Preview – July 2024: No Change, Waiting For Q2 Data
Jul-09 04:16By: Maxine Koster and 1 more...
EXECUTIVE SUMMARY:
- The RBNZ is highly likely to keep rates at 5.5% on July 10, which is unanimously expected, and leave its tone little changed as the MPC has made clear that it is too early to talk about rate cuts. Also, there won't be a press conference or updated staff forecasts and the economy is broadly developing as the central bank expects.
- The MPC may acknowledge the recent weak activity data but is likely to reiterate that monetary policy needs to remain "restrictive" to return inflation to target within a "reasonable timeframe", while it waits for Q2 CPI on July 17 and labour market data on August 7. The July discussion will be monitored to see if a hike was discussed again.
- The RBNZ will not only have important data but also an update of the staff forecasts, which will include the new government budget, for its August 14 meeting. Given weak economic data, there is a chance that easing is brought back to H1 2025 in the OCR projections.
