Free Trial
NEW ZEALAND

ASB: Stagflation On The Horizon

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access

VIEW: ANZ: 40bp Hike On The Table For June

RBA

ANZ note that “a 40bp rate hike was on the table in May and will likely be discussed by the Board in June, though the Board’s stated preference is to return “to normal operating procedures.” This suggests that going more than 25bp in June will require, as Lowe said in his post meeting comments, “a very strong argument to do so.” We think an upward surprise of 1% Q/Q growth in tomorrow’s Wage Price Index (WPI) could be enough to get the RBA over the line for 40bp, though if it comes in at our forecast of 0.8% Q/Q that prospect will recede. There is further important labour market data before June, with employment on Thursday and the national accounts measures on 1 June. With the Board “continu[ing] to be guided by the evidence on both inflation and the labour market” surprises in these data may be enough to support a 40bp move even without a very strong WPI.”

159 words

To read the full story

Why Subscribe to

MarketNews.com

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.

ANZ note that “a 40bp rate hike was on the table in May and will likely be discussed by the Board in June, though the Board’s stated preference is to return “to normal operating procedures.” This suggests that going more than 25bp in June will require, as Lowe said in his post meeting comments, “a very strong argument to do so.” We think an upward surprise of 1% Q/Q growth in tomorrow’s Wage Price Index (WPI) could be enough to get the RBA over the line for 40bp, though if it comes in at our forecast of 0.8% Q/Q that prospect will recede. There is further important labour market data before June, with employment on Thursday and the national accounts measures on 1 June. With the Board “continu[ing] to be guided by the evidence on both inflation and the labour market” surprises in these data may be enough to support a 40bp move even without a very strong WPI.”