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New Zealand Consumer Prices (Q1 2022)

The 1.8% q/q rise in consumer prices in Q1 was broadly in line with the RBNZ’s expectations, which reduces the likelihood of another 50 basis point hike in the OCR in May. But we still think high inflation throughout 2022 will drive the RBNZ to hike rates to 3.0% by the end of the year.
Ben Udy Australia and New Zealand Economist
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Australia & New Zealand Data Response

Australia Retail Sales (May 2022)

The strong rise in retail sales in May highlights the strength in the Australian economy and is consistent with our view that the RBA will continue to hike rates aggressively in the months ahead.

29 June 2022

RBA Watch

RBA to keep hiking by 50bp for now

The Reserve Bank of Australia will probably lift the cash rate by another 50bp in July and August before reverting to smaller 25bp hikes. However, the risks are tilted towards a prolonged period of aggressive tightening and rates may well peak above our current forecast of 3%.

28 June 2022

Australia & New Zealand Economics Weekly

More 50bp hikes coming

We agree with RBA governor Phillip Lowe that market pricing for the Cash rate looks too aggressive. But we also think the consensus is still too dovish. After all, Governor Lowe is starting to grow concerned that wage growth will be too strong to allow the Bank to meet its target. And the RBA is still lagging behind a number of its peers in its hiking cycle. We therefore expect the RBA to hike rates to a peak of 3.1%, higher than the analyst consensus of a peak of 2.60%.

24 June 2022

More from Ben Udy

Australia & New Zealand Data Response

Australia Labour Market (Mar. 2022)

The unemployment rate remaining at its joint lowest rate since the 1970s should be enough to keep the RBA on track to begin hiking rates in June.

14 April 2022

Australia & New Zealand Economics Update

Hawkish RBNZ will hike rates to 3.0%

The RBNZ’s decision to accelerate its hiking cycle shows it is willing to move decisively to get a hand on surging inflation. That’s in line with our forecast that it will hike the OCR to 3.0% by the end of this year.

13 April 2022

RBNZ Watch

RBNZ to accelerate tightening cycle with 50bp hike

Inflation is set to exceed the RBNZ’s forecasts yet again this year. With the Bank becoming increasingly worried that soaring inflation will dislodge inflation expectations, we think it will hike rates by 50bp at its upcoming meeting on 14th April and follow up with another 50bp hike in May.

7 April 2022
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