UBS is out with a preview of the RBNZ decision scheduled for Thursday Sept 10 (Wed in the US and Europe)
All 17 economists surveyed by Bloomberg expect the RBNZ to cut rates on Thursday to 2.75% from 3.00% but further cuts are far less certain.
"We see a subsequent move to 2.5% as the risk scenario, and below that as unlikely," writes UBS. "We see a subsequent move to 2.5% as the risk scenario (i.e. less than 50%), and below that as unlikely. Nonetheless, we expect the RBNZ to keep its options open by maintaining an
easing bias but perhaps making it less forceful (i.e. some further easing 'may be appropriate', as opposed to 'seems likely') and/or making further easing conditional (as in June) i.e. 'depending upon the emerging data'."
Another key spot to watch in the statement is the assertion that 'global economic growth remains moderate.' That could be downgraded due to China and other emerging market worries.
In terms of forecasts, the above-3% forecast this year will be downgraded but that may only be focused on the near term. Look for a forecast of 2% or 2.5%. If medium/long-term forecasts are left unchanged, that's a signal that the RBNZ is at or near the bottom.
Inflation forecasts will also be lowered but the reason the RBNZ may be close to a base in interest rates is that the fall in the New Zealand dollar is inflationary. The kiwi has fallen to the lowest since 2009 at 0.6250 compared 0.8800 last July.
