13 May 2015
RBNZ FSR: Auckland in the crosshairs - ANZ
FXStreet (Bali) - Today's RBNZ FSR coupled with a benign inflation backdrop, reinforces the likelihood of the RBNZ cutting the OCR as soon as next month, according to Philip Borkin, Senior Economist at ANZ.
Key Quotes
"Although the RBNZ still characterises New Zealand’s financial system as “sound”, it believes risks have increased, singling out Auckland property, the dairy sector and inflated global asset prices as a result of prolonged loose financial conditions."
"In a response to the risks it sees in the Auckland housing market, regional LVR restrictions have been introduced (among other changes). These changes are not due to be enacted until 1 October."
"However, as the RBNZ require banks to immediately behave in a manner consistent with the “spirit” of the changes, we believe we will see a shift in sentiment and behaviour in both the lending and broader housing market from today."
"This, along with the current benign inflation backdrop, further reinforces the likelihood of the RBNZ cutting the OCR as soon as next month in our view."
Key Quotes
"Although the RBNZ still characterises New Zealand’s financial system as “sound”, it believes risks have increased, singling out Auckland property, the dairy sector and inflated global asset prices as a result of prolonged loose financial conditions."
"In a response to the risks it sees in the Auckland housing market, regional LVR restrictions have been introduced (among other changes). These changes are not due to be enacted until 1 October."
"However, as the RBNZ require banks to immediately behave in a manner consistent with the “spirit” of the changes, we believe we will see a shift in sentiment and behaviour in both the lending and broader housing market from today."
"This, along with the current benign inflation backdrop, further reinforces the likelihood of the RBNZ cutting the OCR as soon as next month in our view."