RBNZ monetary policy announcement due Wednesday - preview

Author: Eamonn Sheridan | Category: Central Banks

Reserve Bank of New Zealand  Policy Statement and media conference - Due on Wednesday 12 August 2020 at 0200GMT.  

Preview via ASB, the bank says the RBNZ will look deeper than the headlines from the NZ jobs report last week:
  • unemployment didn't really fall
  • It's more that Stats had some trouble with measurement and laid-off workers were unable to "actively" seek work during lockdown
  • Some of the broader indicators we'd suggested following (e.g. hours worked, underutilisation) deteriorated markedly, and about as much as expected. Underneath the veneer of the wage subsidy, the jobs market is softening. And as roughly 450,000 workers roll off the subsidy in coming weeks things will get tougher. We still expect unemployment to rise into the "7s" in coming quarters
we expect the Bank to maintain a cautious tone at Wednesday's meeting, despite NZ economic activity clearly exceeding its prior forecasts
  • time is now on the Bank's side now and it doesn't need to announce further easing measures this week
  • But we could see some fine-tuning of its quantitative easing programme including a small lift in the current $60b cap and an extension to its expiry.
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