Daily Commentary for 29 Jan 2010

This week is a double dose of Reserve Bank governor Alan Bollard. Yesterday the central bank governor left the official cash rate unchanged and delivered a statement remarkably similar to the earlier one in December. The key point is that interest rate hikes are still likely in the middle of the year rather than the first half as some commentators expect. (However, we note one suggested April was the middle of the year).

Today Bollard makes a speech "The crisis and monetary policy: what we learned and where we are going" which we will watch closely to see if there are any hints about when rates will go up and more importantly how big will the jumps be? The standard 25 basis points or 50?

There are no rate changes to report, however we have a new graph which starkly shows how interest rates are very different to their five year averages.