RBNZ shocked the market - TDS

Research Team at TDS, notes that the RBNZ shocked the market, no so much by leaving the cash rate at 2.25%, but in delivering a statement free of a strong dovish bias.

Key Quotes

“But then again, it’s hard to have a dovish bias when forecasts for the TWI, GDP growth and inflation were revised up! A key driver for the RBNZ to remain on hold was the run up in housing posing a risk to financial stability, the RBNZ believing there was little cost in waiting compared to cutting now. TD pencils in an August cut to 2%, but we do acknowledge the risk to this call is for the RBNZ to cut later.”