tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Wednesday, May 25th, 6:31PM

Mortgages

rss
Latest Headlines

Odds on for an August cut

Lower than expected inflation has economists predicting another cut to the official cash rate.

Monday, July 18th 2016, 5:14PM

Whether the bank would move at its next meeting had seemed less clear after a speech this month in which it was made clear that house prices were a concern, and it was acknowledged that low interest rates were partly responsible for fuelling that.

But new data shows that the consumer price index only rose 0.4% in the year to June 30, compared to Reserve Bank forecasts of 0.6%.

Jonathan Williams, of HSBC, said there was a significant policy challenge ahead for the Reserve Bank.

"While inflation remains too low and the recent rise in the NZD is likely to mean downward revisions to the RBNZ's inflation forecasts, the financial stability risks of low interest rates are rising due to the booming housing market," he said.

"Although the booming housing market could make the RBNZ more reluctant to cut further, our view remains that the RBNZ will keep its cash rate setting focused on the inflation target and will use macro-prudential tools to deal with risks in the housing market. With this in mind, our central case sees the RBNZ cut its cash rate by 25bps to 2% in August."

ASB said it too was picking an August cut to 2%.

"Much of the ‘surprise’ in the recent inflation data was due to soft tradable inflation. With the NZD lifting strongly over June and July, tradable inflation will remain very weak for some time and further prolong the return of inflation back to the middle of the target. Meanwhile, beyond construction costs and Auckland rents, there was very little evidence of broad-based increase in domestically-sourced inflation pressures."

Ben Jarman, of JP Morgan said it was hard to be confident about the direction of the OCR, because there was such a sharp trade-off for the bank to navigate beween price stability and financial stability.

"But today's data will likely aid a dovish tilt, and supports the case for an easing in August as we expect."

Tags: OCR OCR forecasts Reserve Bank

« Warnings fly following RBNZ proposalReserve Bank targets investor lending »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 5.35 4.49 5.25 5.55
ANZ 5.54 5.15 5.85 6.15
ANZ Blueprint to Build 2.78 - - -
ANZ Special - 4.55 5.25 5.55
ASB Bank 5.35 4.49 5.25 5.55
Avanti Finance 5.45 - - -
Basecorp Finance 6.45 - - -
Bluestone 5.29 7.49 7.59 -
BNZ - Classic - 4.55 5.25 5.45
BNZ - Mortgage One 5.55 - - -
BNZ - Rapid Repay 5.55 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 5.55 5.35 5.94 5.99
BNZ - TotalMoney 5.55 - - -
CFML Loans 6.45 - - -
China Construction Bank 5.50 5.40 6.14 6.40
China Construction Bank Special - 4.45 5.19 5.45
Credit Union Auckland 5.95 - - -
First Credit Union Special 5.85 4.70 5.20 -
Heartland Bank - Online 4.00 3.85 4.70 4.84
Heretaunga Building Society 5.95 4.80 5.50 -
HSBC Premier 5.49 4.39 5.15 5.39
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.25 4.29 5.09 5.35
Kainga Ora 5.43 4.57 5.58 5.85
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 5.00 5.55 6.19 6.39
Kiwibank - Offset 5.00 - - -
Kiwibank Special 5.00 4.55 5.19 5.39
Liberty 4.84 - - -
Nelson Building Society 5.95 4.95 5.85 -
Pepper Essential 3.44 - - -
Resimac 4.59 5.60 6.16 6.29
Lender Flt 1yr 2yr 3yr
SBS Bank 5.29 4.69 5.35 5.49
SBS Bank Special - 4.19 4.85 4.99
Select Home Loans 4.09 4.29 4.86 5.09
The Co-operative Bank - First Home Special - 4.19 - -
The Co-operative Bank - Owner Occ 5.45 4.29 5.19 5.45
The Co-operative Bank - Standard 5.45 4.79 5.69 5.95
TSB Bank 5.59 5.14 ▼5.79 6.15
TSB Special 4.79 4.34 ▼4.99 5.35
Unity 5.65 4.80 5.50 -
Wairarapa Building Society 5.24 4.55 5.20 -
Westpac 5.54 5.09 5.79 6.09
Lender Flt 1yr 2yr 3yr
Westpac - Offset 5.54 - - -
Westpac Special - 4.49 5.19 5.49
Median 5.45 4.55 5.25 5.52

Last updated: 19 May 2022 10:42am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com