ANZ expects RBNZ to chop ahead of beforehand signaled

• Underlying economic momentum remains weak and is
consistent with disinflation.

• Future fiscal policy is expected to lead to lower
government spending and so doing support monetary policy

• The Q1 GDP data will be critical for the RBNZ in assessing
domestic demand and inflation risks. Private consumption and various investment
and spending indicators will be important to gauge underlying economic
conditions.

• The weak economic backdrop suggests the RBNZ may cut the
Official Cash Rate (OCR) sooner than previously signalled, with expectations
for cuts starting in February 2025.

• GDP expected to expand by 0.2% quarter-on-quarter in Q1
2024, aligning with the RBNZ’s May forecast, and annual growth rate is
projected to be 0.3%.

GDP is coming up next week so one to watch for
the NZD traders. For reference, this morning’s PMI data slowed to 47.2.