RBNZ: will be in no hurry to tighten - Nomura

In the opinion of analysts at Nomura, the downshift in the New Zealand inflation trajectory should see the RBNZ continue to stress that it is in no hurry to tighten policy. 

Key Quotes:

"The RBNZ’s current OCR track tentatively puts the start of a tightening cycle in late 2019. This is at risk of being pushed out further into 2020, particularly given the RBNZ’s updated assessment that the neutral interest rate has drifted lower. This implies that the current low level of interest rates may not be as stimulatory as previously perceived."

"Nevertheless, the message from the RBNZ should be that market pricing, currently factoring in over half a 25bp RBNZ rate hike by mid-2018, is optimistic."