An early preview of the Reserve Bank of New Zealand meeting on Thursday (local time) this week; announcement due at 2000GMT Wednesday 28 January

The RBNZ announcement will follow the Federal Reserve announcement at 1900GMT. This is a cheap shot from the FOMC, trying get some free publicity by getting in ahead of the much-watched RBNZ.

What to expect from New Zealand?

Westpac expect an 'on hold' decision this week, but ... (in brief, & bolding is mine):

  • In December the RBNZ said it expected to leave the OCR at 2.5%, but that it would reduce interest rates "if circumstances warrant."
  • That was on the basis that inflation would rise above 1% in March
  • It now seems clear that circumstances warrant further cuts
  • Inflation is likely to remain below 1% until 2017, and could even drop below zero during 2016
  • The Auckland housing market has slowed, dairy prices have fallen, and global risks are rising
  • We expect the RBNZ to shift to a more explicit easing bias

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Westpac's note is extensive, but that's it in a nutshell.