RBNZ: Forward guidance was unexpectedly dovish - TDS

Analysts at TD Securities note that the RBNZ left the cash rate at 1.75% as widely anticipated, but the forward guidance was unexpectedly dovish, with "We expect to keep the OCR at this level through 2019 and into 2020, longer than we projected in May."

Key Quotes

“The RBNZ's 2% mid-target inflation forecast was pushed back into early 2021, despite full employment and a lower TWI assumption, and the OCR profile was flattened, the first increase pushed back to Q3 2020.”

“The economy is in better shape than these projections suggest, but the RBNZ appears determined to sit on its hands (and re-fuel the housing sector!). The slump in business own activity (and investment intentions) remains the #1 concern for the RBNZ and the government.”