Earthquake eliminates chance of September OCR hike
ANZ Market Focus emphasises that a pause in increasing the OCR will only be a temporary respite and the Reserve Bank is expected to resume removing policy stimulus either late this year or early next year.
It says long-term interest rates are a completely different story, with rates moving higher as market enthusiasm for further quantitive easing (QE) in the US has waned somewhat.
"But while the hurdle for QE is clearly high, we doubt the debate is over just yet and view the stiff rise in long end rates as a typical market correction."
Looking at the impact of the earthquake, ANZ says it is hard to imagine confidence not being impacted which is a concern as it has already been slipping for five months.
Click the button below to subscribe and will have free unlimited access for a limited time to full article and all other articles on the site.
You will also be able to comment on articles on Good Returns.
