Comments from New Zealand Prime Minister John Key crossing the Bloomberg

  • Growing the New Zealand economy is main priority for 2016
  • Government will keep a tight leash on spending

While these comments aren't particularly controversial or noteworthy, what is perhaps most interesting about them is their timing.

The Reserve Bank of New Zealand announcement is due Thursday morning NZ time (9am, which is 2000GMT Wednesday).

We saw Q4 CPI data from NZ last week - it was very, very low.

OK, let me rephrase that. The q/q result was negative, deflation. And the y/y (+0.1%) was barely inflation at all.

The inflation target band for the RBNZ is 1 - 3 % (y/y). Which they are missing out on, and have been doing for a long time. RBNZ do project that inflation will move higher this year, but so far their projections haven't been to hot.

I am reading these comments from Key as some (not so) subtle hints to cut the Official Cash Rate (OCR) further, which will spur economic growth (the NZ economy is doing OK for growth) while the risks of inflation are very low.

Meanwhile, NZD is barely changed on them.

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More from Key:

  • Says government plans more infrastructure spending
  • Infrastructure spending is not a response to slower economy