About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   tmmonline.nz  |   landlords.co.nz
Last Article Uploaded: Thursday, June 20th, 9:08AM
rss
Latest Headlines

OCR Preview: caution expected from the Reserve Bank

Economists do not believe the OCR will change next week, but predict the Reserve Bank will take a cautious stance on future growth, with a number of headwinds for New Zealand and the global economy.

Friday, February 8th 2019, 9:05AM 1 Comment

Next Wednesday, the central bank will make its latest decision on the OCR and will make a Monetary Policy Statement. Economists unanimously agree there will be no movement on the OCR, but expect RBNZ to outline a heightened sense of downside risk. The central bank is expected to continue to temper expectations.

A total of 80% of economists interviewed by TMM Online said they believe the OCR has troughed in this cycle at 1.75%, but 20%, including Michael Reddell and ANZ's Sharon Zollner,  expect OCR cuts as sluggish economic growth and weak inflation continue to bite.

No immediate changes are expected from Reserve Bank governor Adrian Orr, but economists will be watching his words closely. ANZ's Sharon Zollner expects "more dovish tone, acknowledging the changing balance of risks and endorsing current market pricing, which favours cuts".

While BNZ's Doug Steel predicts the MPS  "to at least acknowledge developments since November. We don’t think they will net to too much, if any, change in the main policy message". 

ASB's Nick Tuffley says Orr will "note greater degree of risk around global outlook".

While Brad Olsen of Infometrics said the central bank will balance its outlook on recent data. Olsen said: "Business investment has been weaker than expected, supporting the view that monetary policy should remain expansionary. However, underlying inflationary pressures showed greater heat in the December quarter, underscoring a need to remain accommodative but not overcook it."

Economists remain divided over the long term OCR track, when it will change, and whether it will move up or down. The US Fed has recently dialled back its forecast for rate cuts, while in Australia, the RBA has moved to a neutral stance on interest rates, adopting a more cautious tone.

Olsen of Infometrics is among the more bullish Kiwi economists. He said the Reserve Bank "may raise its interest and inflation forecasts marginally" to bring an OCR hike closer to its prediction of late 2019.

In contrast, ANZ's Zollner said: "We have pencilled in a cut in November, with two follow-up cuts in 2020. This is not contingent on whether the RBNZ changes their growth and OCR forecasts meaningfully next week or not. We expect the economy to continue to fail to accelerate as the year progresses, making the case for easier policy clear in time."



  

 

Tags: ANZ ASB Mortgage Rates OCR OCR forecasts RBNZ Reserve Bank

« NZ advisers hit out at Royal Commission Westpac: OCR to hold until 2022 »

Special Offers

Comments from our readers

On 12 February 2019 at 9:51 am KatyM said:
Thanks for the update

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • A Capital Offence
    “Who ever made the decision to build all these 100s of units all at once must have rocks in their head. This philosophy of...”
    12 hours ago by Maxwell K
  • FSLAA starts June 2020
    “If I've got this right, this announcement means that the implementation of the new regime has slipped by another 4 months...”
    17 hours ago by Murray Weatherston
  • KiwiSaver and risk, how far out of bounds are we?
    “I think the situation under the rules that have been promulgated so far is actually quite clear. Under the new regime, when...”
    17 hours ago by Murray Weatherston
  • FSLAA starts June 2020
    “Great, just set up the application process and send us forms, so we can get on with it please? ...”
    18 hours ago by AdviserMan
  • FSLAA starts June 2020
    “While I know current AFA's will get through the new regime without too much in the way of hassles, I equally know that current...”
    18 hours ago by Comprehensive Planner
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.69 4.39 4.35 4.55
ANZ Special - 3.89 3.85 4.05
ASB Bank 5.70 4.45 4.39 4.55
ASB Bank Special - 3.95 3.89 4.05
BNZ - Classic - 3.89 3.95 3.89
BNZ - Mortgage One 6.40 - - -
BNZ - Rapid Repay 5.85 - - -
BNZ - Std, FlyBuys 5.80 4.69 4.59 4.79
BNZ - TotalMoney 5.80 - - -
Credit Union Auckland 5.95 - - -
Credit Union Baywide 6.15 4.95 4.95 -
Lender Flt 1yr 2yr 3yr
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 - - -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.60 4.75 -
Housing NZ Corp 5.80 4.69 4.49 4.45
HSBC Premier 5.89 3.79 3.79 3.89
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
Lender Flt 1yr 2yr 3yr
ICBC 5.65 3.85 3.95 3.89
Kiwibank 5.80 4.60 4.60 4.84
Kiwibank - Capped - - - -
Kiwibank - Offset 5.65 - - -
Kiwibank Special - 3.85 3.85 4.09
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 6.10 4.89 4.99 -
Resimac 5.30 4.86 ▼4.14 ▼4.19
RESIMAC Special - - - -
SBS Bank 5.79 4.85 5.05 5.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 3.89 3.99 3.99
Sovereign 5.80 4.45 4.39 4.55
Sovereign Special - 3.95 3.89 4.05
The Co-operative Bank - Owner Occ 5.65 ▼3.89 ▼3.95 4.05
The Co-operative Bank - Standard 5.65 ▼4.39 ▼4.45 4.55
TSB Bank 5.69 ▼4.45 4.49 ▼4.55
TSB Special - 3.95 3.99 4.05
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.79 4.69 4.79 5.19
Westpac - Offset 5.79 - - -
Westpac Special - 3.89 3.85 4.05
Median 5.80 4.45 4.39 4.19

Last updated: 19 June 2019 9:13am

News Quiz

The maximum remuneration model for Australian life insurance advisers is to be set at what?

Upfront 40% + trail 20%

Upfront 50% + trail 10%

Upfront 50% + trail 20%

Upfront 60% + trail 10%

Upfront 60% + trail 20%

MORE QUIZZES »

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