New Zealand - Slowdown will keep rates on hold until 2021

The Bank will be weighing up the impact of a tighter labour market but weaker GDP growth when it leaves interest rates at 1.75% on Wednesday. It’s unlikely that any of the recent data will cause the RBNZ to change their forecasts for interest rate hike in 2020. But we think the economy won’t be as strong as the Reserve Bank anticipates so we still see interest rates remaining on hold until late 2021.