VIEW: BNZ Now Look For The RBNZ To Hike In November '21

BNZ note that "we knew that today's QSBO would support our view that the economy was overheating. However, not only did it do that but it reveals an economy even hotter than our already hot perceptions. The RBNZ watches this survey closely. While the survey is probably too late to be fully incorporated into the Bank's formal forecasting process, it is not too late to enter the Monetary Policy Review deliberations and rhetoric. For a very long time now we have been highlighting the excesses that were developing in the economy. For a while we were a minority of one. Now, however, there is almost universal acceptance that this is the case. The missing link is the Reserve Bank itself. But surely this will no longer be the case when it produces its Monetary Policy Review next Wednesday. We actually think the conditions are ripe to tighten now. But this would, probably be a leap too far for the Bank. Nonetheless, today's data confirm our view that the only questions now are when will rates rise and by how much? The when has clearly moved closer and so we formally move our rate hike call to November 2021."