A research note to clients from Deutsche Bank New Zealand senior economist Darren Gibbs, saying:
- The +1% q/q Q1 result was below the RBNZ’s 1.1% forecast
- But with the revisions to prior data Q1 activity was a shade higher than expected
- Thinks today’s result is enough for another hike at the July 24 meeting, with a pause until December after that
“We expect the RBNZ to indicate on 24 July that it intends to pause the cycle temporarily at that point, allowing more time for evidence to accumulate on the early impact of the initial policy tightening.
At this point, beyond 24 July we see scope for one further rate hike this year, most likely at the final meeting on 11 December.
This latter rate hike will become more likely if evidence emerges to suggest that strong migrant inflows are beginning to reinvigorate the housing market (so far the evidence is scant)”
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Meanwhile, NZD is just above session lows. Earlier posts from here.