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Aug 03 - 10:55 AM

NZD: Will Labor Market Data Make the RBNZ’s Decision Easier? - Credit Agricole

By eFXdata  —  Aug 03 - 09:35 AM

Credit Agricole CIB Research discusses NZD outlook ahead of tonight's NZ's labor report.

"Indicators of strong inflationary pressures due to supply bottlenecks as well as labour shortages, both aggravated by closed international borders, will pressure the RBNZ into raising rates potentially before the unemployment rate reaches its pre-pandemic level 4%. Indeed, the RBNZ has already stopped its asset purchases and is on track to be the first G10 central bank to raise rates and to hike rates in mid-August," CACIB notes. 

"Strong labour market data and a further decline in the unemployment rate would make it an easier decision for the RBNZ. Strong wages growth would confirm that inflation pressures are building in the economy and that the RBNZ has to act," CACIB adds. 

Source:
Crédit Agricole Research/Market Commentary

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