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28 Jan 2014
Flash: RBNZ may hold hiking rates until March - RBS
FXstreet.com (Bali) - According to Greg Gibbs, FX Strategist at RBS, the RBNZ is likely to hold rates unchanged until March, time when they will probably initiate an aggressive tightening cycle.
Key Quotes
"While the construction industry remains very strong, the evidence suggests that there is not a credit fuelled surge in house prices that might demand immediate further tightening. "
"As such, the RBNZ may choose to leave its decision to hike until March when it will present its quarterly monetary statement and forecasts. The high NZD, especially against the AUD, may be a factor that discourages them from appearing too hawkish at this stage."
"The rates market is pricing nearly a 50% chance of a 25bp hike this week (Thursday morning, 30 Jan) and has 38bp of hikes priced by the second RBNZ policy meeting of the year (13 March), and around 120bp of hikes over 12 months."
"The RBNZ warned last year that it expects to raise rates this year, and the recent price and broad activity data have increased the likelihood that they act early. However, the RBNZ may still allow some more time to assess the contractionary effect of its high LVR restrictions on mortgages established on 1 October last year. "
Key Quotes
"While the construction industry remains very strong, the evidence suggests that there is not a credit fuelled surge in house prices that might demand immediate further tightening. "
"As such, the RBNZ may choose to leave its decision to hike until March when it will present its quarterly monetary statement and forecasts. The high NZD, especially against the AUD, may be a factor that discourages them from appearing too hawkish at this stage."
"The rates market is pricing nearly a 50% chance of a 25bp hike this week (Thursday morning, 30 Jan) and has 38bp of hikes priced by the second RBNZ policy meeting of the year (13 March), and around 120bp of hikes over 12 months."
"The RBNZ warned last year that it expects to raise rates this year, and the recent price and broad activity data have increased the likelihood that they act early. However, the RBNZ may still allow some more time to assess the contractionary effect of its high LVR restrictions on mortgages established on 1 October last year. "