Reserve Bank of New Zealand projection from ANZ in New Zealand.
In brief:
- We have tweaked our Official Cash Rate (OCR) forecast and now
expect the first OCR cut to come in February 2025, rather than
May. - domestic
inflation … we expect that meaningful progress is
around the corner. - The real economy is very weak and given the vibe
of “soft data” (surveys, leading indicators and the like), we are now
more confident in the weak economic outlook - Before cutting the OCR, the RBNZ needs to not only be confident that
CPI inflation is on its way to 2%, but that it can be reasonably
expected to subsequently stay within the 1-3% target band. - by February next year, we are anticipating that the RBNZ
will have seen Q4 CPI inflation at 2.6% y/y (non-tradable still 4.7%
y/y, but we are forecasting it to drop sub-4% the following quarter),
and unemployment through 5%. That should do it, in our view.
This article was written by Eamonn Sheridan at www.forexlive.com.
