RPT--🏦🇳🇿Cable FX Macro Weekly Note: RBNZ OCR Decision

**As seen in Risk In The Week report 08/12/23, subscribe at cablefxm.co.uk/reports

Back in July, the RBNZ held the official cash rate steady at 5.5%, this was expected by all surveyed economists. The board said inflation is expected to continue to decline while the level of rates is seen slowing spending. On the labour market, the central bank noted that there were signs of cooling down and that vacancies were falling. On housing, the RBNZ said that prices were returning to more sustainable levels, however, a recent report showed N.Z. house prices rising by 0.4% in June and sales recovering, according to the Real Estate Institute of New Zealand. The data is supporting the view that the decline in home values is over and that we could see prices receiving over the coming months despite high mortgage rates. Lastly, the RBNZ reiterated its policy measures are aimed to slow inflation and that it will continue to track price developments. Economists at ING see the central bank holding the OCR steady in August, they pointed to the most recent labour data. The unemployment rate unexpectedly jumped to 3.6% in Q2, while wages eased to 4.3% showing signs of pressure dissipating in the labour market. ING added that while CPI seems to be rising below the central bank forecast, core measures are proving to be sticky. OIS market pricing sees the RBNZ staying unchanged until Summer next year, forward rates see N.Z. 2-year yield falling to 4.6937% from the current 5.3600% a year from now.