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BNZ: Strong But Not Strong Enough

NEW ZEALAND

BNZ note that "today’s labour market data were not as strong as we had expected. More importantly, they weren’t as robust as the RBNZ had anticipated. The RBNZ has been reacting strongly to starting point surprises. We think the combination of the weaker-than-anticipated inflation and softer-than-expected labour market data should, from a consistency perspective, result in the Bank moderating its interest stance. Accordingly, we now believe the RBNZ will raise its cash rate by 50 basis points at its February 22 Monetary Policy Statement rather than the 75 we were picking prior to the labour data release."

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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