Still some hope OCR will be cut again this year
Regardless of this, it believes there will be little impact on mortgage rates whether the RBNZ cuts or not.
"Deposit rates are unlikely to follow the OCR lower. Furthermore, given the global backdrop long-term rates are more likely to rise than fall over time: any OCR cuts may only temper the pace of increase," it says.
The ANZ Market Focus is holding equally tightly to its view that the OCR is unlikely to see further cuts, suggesting there is only a one-in-five chance of an OCR fall. However, it suggests that should the RBNZ decide to cut, it is likely to be a 50 basis point reduction, rather than 25 basis points. It describes the interest rate curve as caught in a "tug-of-war" between global sentiment and the RBNZ's "on-hold for longer" view.
Meanwhile, Westpac's Weekly Commentary states that the RBNZ struck a "surprisingly dovish chord" in last week's OCR review, suggesting it was more "downbeat" than June's Monetary Policy Statement. There was no acknowledgement of the improving global outlook, or that domestic factors are "setting the stage for recovery", it says.
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