VIEW: ASB now expect "the OCR to remain on.....>

RBNZ: VIEW: ASB now expect "the OCR to remain on hold at its record low of 1.75%

until Aug '20 (prev. '20). The pushing out of the OCR profile comes despite a

modestly firmer starting point for NZ wholesale interest rates and an unchanged

OCR profile in the Nov Monetary Policy Statement. It reflects our judgment that

the growth and medium-term inflation outlook will not be strong enough to clear

the high hurdle necessary to trigger an OCR hike. However, we also view the

hurdle to OCR cuts as having risen given the solidity of recent data, high

labour utilisation and various economic supports that should keep the economy

moving. We also expect very mild RBNZ policy tightening by historical standards,

culminating in the OCR peaking at just 2.75% this cycle (from late '21). Our

recent research suggests the 'neutral' OCR has been trending lower since the

Global Financial Crisis (GFC), and could continue to ease from current levels

(around 2.75%). The RBNZ will also be mindful of not getting policy settings too

far out of synch with other central banks."