NZ: Market pricing was unmoved by the RBNZ’s OCR Review - Westpac

Imre Speizer, Research Analyst at Westpac, points out that there were no surprises for markets in the RBNZ’s OCR Review statement as it kept the OCR on hold at 1.75%, retained a neutral bias, and repeated the message that the OCR is likely to remain on hold for a long time and all of this was widely expected. 

Key Quotes

“Scanning the statement for any changes compared to February’s reveals only minor tweaks, and even there the positives and negatives cancel each other out.”

“The positive changes were a welcoming of the NZD’s decline, omission of the adverb “gradually” when describing the expected rise in inflation to the 2.0% mid-point target, and a slight dilution of geopolitical risks.”

“Negative changes were an observation global core inflation remained low, NZ GDP growth was temporarily weak, and dairy prices had fallen.”

“There was really nothing for markets to latch onto among the above, with the result that the NZD was largely unmoved and OIS pricing didn’t budge.”