NZ: Risk of an 11 August RBNZ rate cut is now below 50/50 - TDS

Research Team at TDS, notes that in a highly anticipated speech, RBNZ Deputy Governor Grant Spencer (with his Head of Financial Stability hat firmly on) explored how the New Zealand housing market got this overheated (again) and offered three policy options to curb demand for housing while supply caught up.

Key Quotes

“However, in a market where macroprudential tools were expected to be deployed instead of being discussed, the risk of an 11 August cut is now below 50/50 in our view, and subsequently the NZD has jumped from $US0.714 to $US0.719 and we expect further upside from here.  $US0.75 isn’t out of the question over the coming weeks, in our view, if the August Monetary Policy Statement again focusses on housing and not the exchange rate.”