RBNZ to give a steer on rates today
Tuesday, May 24th 2011, 6:56AM
The Reserve Bank will today release its inflation expectations survey should reaffirm the view that there is no urgency for the interest rate tightening cycle to resume anytime soon.
"The survey of business managers' inflation expectations will simply add to the case for RBNZ officials to maintain current, accommodative policy settings throughout the remainder of the year," JP Morgan says.
"We believe inflation expectations will have remained steady over the two-year horizon at 2.6%.
"Over the one-year horizon (they) will drop again, from 2.9% to 2.8%, with the risks skewed toward a lower number on both measures. The drop in the one-year measure follows a near 1%-point fall over the last two quarters. With inflation expectations anchored, pricing intentions subdued, and underlying inflation benign, there is little impulse for Dr Bollard to remove the current stimulus in place."
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