RBNZ: No fireworks offered - TDS

Analysts at TDS note that the RBNZ left the official cash rate (OCR) at 1.75% and the brief statement left a blank playbook for incoming RBNZ Governor Adrian Orr.

Key Quotes

“As expected, we take the opportunity to push back the timing for the first RBNZ hike to November. Consensus does not expect a rate rise this year.”

“The conclusion "Numerous uncertainties remain and policy may need to adjust accordingly" remained intact once again. There was no explicit mention of the exchange rate. There were no forecasts nor is there a press conference, that won't happen until 10 May.”

“Incoming RBNZ Governor Orr (starts Tuesday) is untested, and so global market participants will be poring over every word when he does speak. While Spencer left a blank page for Orr to make his mark, it is difficult to form a concrete view on policy while we do not know what the Bank's expanded mandate is and what the policy process will be (board, Minutes, internal vs external, etc).”

“Nevertheless, aside from these obstacles, we change our view to hikes in both Nov 2018 and Feb 2019 (the RBNZ doesn't meet in between).”