RBNZ seen on hold until H2 2018 - UOB Group
United Overseas Bank sees the Reserve Bank of New Zealand on hold until the second half of next year.
"The bank reaffirmed that interest rates would "remain accommodative for a considerable period", noting that "numerous uncertainties remain and policy may need to adjust accordingly". This was unchanged from its prior statement in June, and helps cement the view that rates are unlikely to move in either direction for some time yet.
We remain of the view that monetary policy is unlikely to change until at least the second half of 2018. The New Zealand Dollar and local front-end government bond yields initially struggled to find direction. However, both ended up climbing their way out of choppiness as the markets digested the central bank's policy statement. Nonetheless, the NZD has turned heavy since - last seen around the 0.7300-region. Speaking before a Select Committee of the country's Parliament, Wheeler was unusually explicit for a central banker on the subject of the currency. "We would like to see a lower exchange rate," he said, before reminding his listeners around the world that intervention in the foreign exchange market is "always open" to the RBNZ. Wheeler noted that strong domestic growth had boosted demand for the currency and said that he didn't feel a rate cut was needed to bring inflation back up to its 2% target level".
Following Wheeler's comments we had more rapid downside as McDermott gave an interview.