VIEW: Westpac: Lack Of Fresh Signals

Westpac note that “the main signal to take from today’s statement was the lack of a signal – there is no change in the RBNZ’s plans to get on top of inflation through assertive action. As such, there is no reason to change our view of a further 50 basis point hike at the August Monetary Policy Statement. That would be entirely in line with the RBNZ’s May projections. The August review itself may be an opportunity to review the situation. For one, the OCR will have reached 3% by that point, much closer to the endpoint that the RBNZ envisages. Secondly, it will have the benefit of a full set of economic forecasts, along with additional time to consider the weakening global backdrop. We still expect further, though more modest, rate hikes beyond that, reaching a peak of 3.50%.”