### POV: Wait-and-Watch Likely After a.........>

RBNZ: ### POV: Wait-and-Watch Likely After a Double-Barrel Cut

Markets were caught off guard when the RBNZ decided to lower the OCR by 50bps

last month. While global and local risks remain skewed to the downside, the

deeper than standard cut will likely allow for a wait and see stance, for now.

Q2 GDP data was in line with the RBNZ forecasts, even as growth cooled to a

multi-year low. Nonetheless, a familiar array of downside risks point towards

the potential for the reintroduction of an easing bias. RBNZ Gov Orr seemed to

be signalling staying on hold when he spoke with BBG in Jackson Hole, stating

that the MPC will "assess the situation in Nov." Tread with caution though,

Orr's well-known communication problems obfuscate the implications of his words.

- Base Case: The OCR left unchanged, accompanied by the insertion of a clear

easing bias, leaving the MPC room for further easing if needed.

- Dovish risk: The MPC delivers a 25bps cut to the OCR, reaffirming its

pre-emptive attitude.

- Hawkish risk: No change to the OCR and language, lack of clear easing bias.