The RBNZ kicks off its easing cycle with a 25 bps rate cut. Australian jobs figures today may show when the RBA might move. US CPI inflation in July met expectations. There’s another ‘will they - won’t they’ rate decision today, in the Philippines.
In our bonus deep dive interview, ANZ New Zealand Chief Economist Sharon Zollner analyses why the RBNZ felt it was able to cut rates a full year ahead of its previously published forecasts.
5 things to know:
The RBNZ has started its easing cycle, cutting the Official Cash Rate by 25 basis point to 5.25%. ANZ New Zealand Chief Economist Sharon Zollner says the move reflects increased confidence that the recession the RBNZ wanted has weakened demand enough to ensure CPI inflation will return to its 1-3% target band.
Sharon says new forecasts released by the RBNZ imply three more cuts across its next three meetings, and for the OCR to settle at 3% by mid-2027.
US July CPI inflation came in as expected at 0.2%. ANZ Head of G3 Economics Brian Martin says around 100 basis points of Fed rate cuts remain priced in for three meetings in 2024.
Australia’s July jobs figures today will provide an extra clue as to when the RBA might cut rates. The consensus is for the unemployment rate to stay at 4.1%. ANZ Head of Australian Economics Adam Boyton sees it nudging up to 4.2% as employment drops by 5,000.
There’s another ‘will they, won’t they’ rate review in the Philippines today. ANZ Economist Arindam Chakraborty says there has been speculation of a rate cut, but various data points to the central bank - the BSP - holding at 6.5%.
Cheers
Bernard
PS: Catch you tomorrow with analysis of those Australian jobs figures.
