ANZ's call is for a 50bp interest rate hike from the Reserve Bank of New Zealand on February 22. IOt was made after the inflation data last week:
The inflation data ICYMI:
- New Zealand Q4 inflation 1.4% q/q (expected 1.3%) 7.2% y/y (expected 7.1%)
- RBNZ's own CPI indicator 5.8% y/y (prior 5.6%)
ANZ says the labour data earlier today reinforces their 50bp rate hike call. In brief from their note:
- The labour market remained extremely tight in Q4, consistent with business survey data showing labour shortages were still the top constraint facing firms at the end of 2022. But cracks are beginning to show.
- The Q4 data still show a labour market beyond ‘maximum sustainable employment’, but some signs of softening are beginning to show. And as we look to 2023, timely indicators point to a significant easing in labour market pressures, with job ads, monthly filled jobs growth, and employment intentions all easing significantly in recent months.
- Combine these timely indicators with Q4 CPI inflation coming in cooler than the RBNZ feared, and we see a strong argument for the RBNZ to hike ‘just’ 50bp in February, rather than the 75bp signalled by the November MPS OCR forecast.
The jobs data ICYMI:
- New Zealand jobs report for Q4 2022: Unemployment rate 3.4% (expected 3.3%)
- NZD/USD drops a few points after the New Zealand jobs market report
BNZ tip +50 in February also:
