Reserve Bank of New Zealand meet today – BNZ calls for an immediate rate cut

The Reserve Bank of New Zealand is at 0200 GMT Wednesday, which is 2200 US Eastern time on Tuesday evening.

Earlier previews:

Via BNZ, forthright views:

  • BNZ economists argue easing is “already overdue”
  • Economy “buckling” under tight conditions, slumping migration, government cuts
  • Recent data shows manufacturing/services PMIs at GFC levels, retail spending down, job ads plummeting
  • Inflation now “behaving itself” – June CPI came in 0.3% below RBNZ expectations
  • BNZ forecasts 25bp cut in August, followed by consecutive cuts to 2.75% low
  • Warns delay risks “unnecessary volatility in output and interest rates”
  • Notes market pricing even more aggressive – 100bps of cuts by November
  • Expects RBNZ to remove tightening bias, bring forward first cut substantially
  • But cautions RBNZ’s “propensity to surprise” creates uncertainty

Key takeaway: BNZ sees risks tilted towards delay rather than earlier move. Market pricing looks overly aggressive in near-term.

This article was written by Eamonn Sheridan at www.forexlive.com. Source