NZD: Cooling housing market easing RBNZ rate hike tail risk – ING

In view of analysts at ING, New Zealand’s August QV house price data (Thursday) will be of domestic interest given signs of the New Zealand housing market losing steam.

Key Quotes

“A further slowdown in house price growth (prior 6.4% YoY) would be a thumbs up to the RBNZ's macro-prudential policies put in place last year.”

“From an NZD perspective, we note that this story reduces any tail risk of near-term rate hikes to address any financial stability concerns - which arguably may have been behind the Bank of Canada's recent hawkish shift. Supportive evidence for a wait-and-see RBNZ policy bias is likely to contain any domestically-generated NZD upside in the near-term. 2Q terms of trade data also due next week (Thursday) and we would expect growth here to slow given the recent price dynamics in the domestic dairy markets.”