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MNI RBNZ Preview - July 2021: Hawks Are Circling Above RBNZ

Executive Summary

  • Since the previous Monetary Policy Statement, New Zealand's data continued to suprise to the upside, with mounting inflation pressure and severe labour shortages evident.
  • A firmer than expected Q1 GDP report and a particularly upbeat QSBO survey prompted rounds of hawkish RBNZ repricing, with all big four Kiwi banks now expecting the next OCR hike in November.
  • The RBNZ typically refrains from policy action at interim MPRs, but they are expected to acknowledge the message conveyed by macroeconomic data, with the tone of their rhetoric providing the main thing to watch.

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