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MNI RBNZ Preview-Oct 2024: Easing Pace May Pickup On Q3 Data

The RBNZ meets on Wednesday October 9 and is widely expected to cut rates 50bp to 4.75%.
Central Bank PreviewAPACNew ZealandRBNZ - PreviewCentral Bank ReportsGlobalStoryRegionMarkets

EXECUTIVE SUMMARY: 

  • The RBNZ meets on Wednesday October 9 and is widely expected to cut rates 50bp to 4.75% but with inflation and labour market data not due until after the meeting, it is a close call. Four of the 23 analysts on Bloomberg expect a 25bp reduction and the NZIER is split 5 to 4 between 50bp and 25bp. 
  • Inflation indicators are pointing to Q3 CPI coming in below the top of the RBNZ’s target band of 1-3%, while activity data confirmed that currently the economy is in the “darkest period”.
  • The timing of the upcoming meetings is also likely to be important. There are 7 weeks between the two meetings and the RBNZ may feel that it cannot wait that long as the economy needs monetary “restraint” reduced at a faster pace than implied in August’s OCR profile. The other consideration is that there are only two meetings before mid-February. 

FOR THE FULL PUBLICATION PLEASE USE THE FOLLOWING LINK:  MNI RBNZ Preview - October 2024.pdf

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EXECUTIVE SUMMARY: 

  • The RBNZ meets on Wednesday October 9 and is widely expected to cut rates 50bp to 4.75% but with inflation and labour market data not due until after the meeting, it is a close call. Four of the 23 analysts on Bloomberg expect a 25bp reduction and the NZIER is split 5 to 4 between 50bp and 25bp. 
  • Inflation indicators are pointing to Q3 CPI coming in below the top of the RBNZ’s target band of 1-3%, while activity data confirmed that currently the economy is in the “darkest period”.
  • The timing of the upcoming meetings is also likely to be important. There are 7 weeks between the two meetings and the RBNZ may feel that it cannot wait that long as the economy needs monetary “restraint” reduced at a faster pace than implied in August’s OCR profile. The other consideration is that there are only two meetings before mid-February. 

FOR THE FULL PUBLICATION PLEASE USE THE FOLLOWING LINK:  MNI RBNZ Preview - October 2024.pdf