OCR review to be requisitely boring

Wednesday, January 27th 2010, 2:14PM

BNZ Markets Outlook summed up the views of most economists this week saying "we expect Governor Bollard will be requisitely boring at Thursday's OCR review".

Craig Ebert, BNZ markets outlook economist, believes further clarification to the hiking cycle may be provided by the Official Cash Rate (OCR) review tomorrow, although he expects more explicit signaling likely won't come from the Reserve Bank until the March Monetary Policy Statement.

Westpac Weekly Commentary agrees saying a signal is more likely to come in March with the benefit of another month or two of data and a full set of forecasts highlighting the recovery.

"With recent data falling broadly in line with the Reserve Bank's expectations, we don't expect any significant changes in their one-page media release tomorrow."

ASB Business weekly says it expects the Reserve Bank to hold the cash rate unchanged at 2.50% and to keep a similar tone as the December statement with its assessment of hiking rates around the middle of 2010 remaining in place.

Westpac and ASB both expect the first rate hikes to be in April as the Reserve Bank has a substantial amount of policy stimulus to unwind.

Mortgage rate advice from Westpac this week suggests that repaying more than the minimum amount and spreading the loan over a mix of terms can help to reduce overall risk regarding uncertain future interest rate changes.

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