NAB Research discusses its expectations for tonight's RBZN policy meeting.
"At Wednesday’s OCR Review, the RBNZ is widely anticipated to hold its ground, after the shock 50bps cut last month. The larger rate cut looks to have had the opposite impact on confidence – our anecdotes suggest businesses are less inclined to invest after the shock easing, while Westpac’s consumer confidence survey highlighted that the larger than expected rate cut scared more people than it helped, with consumers now more inclined to pay off debt than spend any unexpected cash windfall. Another rate cut so soon would “scare the horses” again so it is apt for the Bank to delay any further rate cut decision until the November MPS," NAB notes.
"Our NZD view remains one of near-term consolidation, ahead of another lurch down, with a year-end target of 0.6150, the mid-point of the 0.60-0.63 we expect to see emerging," NAB adds.