RBNZ Refrains from Action – MUFG
Derek Halpenny, European Head of GMR at MUFG, suggests that prior to the
surprise decision by the BOJ, the RBNZ also surprised the markets by
not easing.
Key Quotes
“Given the RBNZ
has been quite explicit about the threat from deflation expectations
were high that action might be taken. The RBNZ did leave open the
likelihood of additional easing at the next meeting on 8th June.
Certainly
the RBNZ will continue to emphasise opposition to the strength of the
New Zealand dollar – Governor Wheeler stated today that a lower New
Zealand dollar was “desirable to boost tradables inflation and assist
the tradable sector”. We see limited upside for NZD/USD from here and
expect continued concerns over too low inflation to fuel expectations of
additional easing by the RBNZ.”
