VIEW: ANZ: OCR Cuts Slower, Less Certain

ANZ note that "the RBNZ today retained a dovish tone about the medium-term outlook, while acknowledging and welcoming robust recent data. It "must remain prepared" to provide additional support if necessary. There was no change to the OCR, forward guidance, or OCR forecasts. However, the unconstrained OCR track suggested the RBNZ now considers around 100bp less stimulus necessary. The Funding for Lending Programme (FLP) will launch in December, with relatively few strings attached, with loans for a three-year duration. Despite the RBNZ's ongoing dovish rhetoric, the evolving balance of risks suggests less justification for rushing into a negative OCR. We are now forecasting an RBA-style 15bp cut to 0.10% at the May MPS, with a highly conditional further 35bp cut in August taking the OCR to -0.25%."