VIEW: ASB continue "to exp. the RBNZ to........>

RBNZ: VIEW: ASB continue "to exp. the RBNZ to remain on hold into H120, though

the risk is a later start given the moderate growth exp. & still-benign wage &

core inflation trends. The RBNZ largely delivered what was exp., trimming its

growth exp. a touch after a strong Q218 outcome & boosting its near-term

inflation exp. The policy assessment's opening wording presents directional

risks to the OCR in a different way, but the message is essentially the same.

The OCR could move either way, depending on developments. The RBNZ remains

mindful of the downside risks to growth presented by weak biz conf. But it is

also wary that inflation pressures may turn out to be stronger than it exp.,

particularly if biz pass on cost pressures to a greater extent than factored in.

The RBNZ's unrevised OCR track suggests that the risks of a near-term OCR cut

have not intensified. The strength of Q3 employment highlighted this also. A cut

remains a non-negligible risk, but material weakness in 'hard' data such as GDP

would be needed to seriously entertain a cut. But we flag that our own growth

outlook is more in line with the RBNZ's downside risk scenario than its central

view, though we also exp. a stronger inflation impact from wage growth."