• Apologies for the late delivery, technical issues prevented us from posting the weekly on the website yesterday. 
• Last Thursday’s Monetary Policy Statement showed the RBNZ is focussing on several expected issues. However, a “subtle” wording change (implying earlier OCR hikes) contributed to jumps in interest rates and the NZD. 
• Sometimes it is not what is said but the context that carries the weight.  It appears markets have reacted sharply to the RBNZ backing away so soon from its apparently firm stance. 
• The challenge with giving an explicit timeframe for action is that as the facts change the timing is also likely to change.  Ahead of the October OCR review we suggested the RBNZ would be better served in the longer term by moving away from an implied timeframe and make the eventual tightening cycle more conditional on economic events.

Read the full PDF report.

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