RBNZ leaves Rates Unchanged At 5.5%, NZD Edges Slightly Higher

The NZD is higher and local rates are unchanged post the RBNZ outcome. As expected, the decision was to hold rates steady at 5.50%. RBNZ board members acknowledge that most major central banks are “cautious” about easing policy given the risk of inflation remain sticky.

• The RBNZ notes that in most major economies the better balance between the demand for, and supply of, labour has been reflected in a decline in job vacancies. However, growth in unit labour costs remains elevated. Inflation will continue to be persistent in regions where higher labour costs have not been accompanied by improved productivity or reduced profit margins, see statement here.
• The NZD has strengthen, however has so far fallen short of testing Tuesdays highs of 0.6076, managing to make post RBNZ highs of 0.6075 , we have erased some of the move higher and now trade at 0.6061.
• In rates, NZGBs futures are unchanged after the decision and 4-6bps lower for the day, equities are also unchanged post the announcement.