Barclays on the Reserve Bank of New Zealand MPS and Orr yesterday. This in brief:

  • reintroduced symmetric forward guidance that the next move could be "up or down," largely as expected
  • RBNZ governor Adrian Orr reinforced the supportive outlook for the domestic economy, stating that the risks of a rate cut have not risen
  • re-affirmed data dependency
  • RBNZ's statement showed it is optimistic about on-going economic support from monetary and fiscal policies and strong employment growth

Further ahead Barclays expects:

  • we think that the revisions to the bank's growth and inflation projections for 2019, being downward, suggest that risks for cuts in the OCR have risen as compared to the last meeting in November
  • However, we maintain our base case of no change in the OCR for the foreseeable future.