The new Governor of the Reserve Bank of New Zealand will be delivering the bank's Monetary Policy Statement tomorrow. Economists think it's highly unlikely that Adrian Orr will change Official Cash Rate in his debut. What they'll be paying most attention to is the language he deploys. That will give the banks and the property market an indication of where the RBNZ believes the New Zealand economy is heading.

ASB's economic team doesn't expect Orr to materially shift the RBNZ’s monetary policy outlook. In their latest outlook, they say the strength of the labour market suggests there's no need for the OCR - currently at a record-low 1.75 percent, where it has been for more than a year - to change for some time.

"This is the first OCR decision since Orr started along with the new Policy Targets Agreement (PTA) that includes the employment objective. And that will make this statement the most keenly read one since the RBNZ signalled the end of its last easing cycle," ASB Bank chief economist Nick Tuffley says.

In March, Finance Minister Grant Robertson and Orr signed a new PTA that adds the goal of "supporting maximum levels of sustainable employment within the economy" to the existing goal of price stability.

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While it is possible Governor Orr will steer the RBNZ slightly differently to his predecessors "we don't expect him substantially influence the RBNZ's current take on the appropriate direction for monetary policy," Tuffley says.

CoreLogic says mortgage interest rates have stayed flat and low in recent weeks, with the retail banks competing strongly for the best borrowers. "Alongside NZ’s migration balance with Australia and investors’ listings behaviour, interest rates are one of three key factors we will be watching closely for the rest of 2018 and into 2019. This is because almost 90 percent of New Zealand's fixed-rate mortgages (which are about 80 percent of all mortgages) roll over within a two-year horizon," CoreLogic says

"On that front, the latest CPI inflation data was subdued (1.1 percent annual) and came as no surprise to the markets. The prospect of no change in the OCR until at least next year remains likely, although we will get further insight on this at the next Reserve Bank Monetary Policy Statement and rates review on May 10."

Tuffley expects the first rate increases to come in the second half of next year and notes the bank could hold off for even longer given higher wholesale interest rates, weak business and consumer confidence and tepid inflation. The central bank's most recent forecast from February showed the OCR rising to 1.9 per cent in June 2019, unchanged from its prior projection in November.

A full rate increase is still signalled by March 2020 when the benchmark rate is forecast to be 2 per cent. Markets are expecting the first hike in June. The trade-weighted index is about 2.5 per cent below the level the Reserve Bank had projected as an average for the second quarter in its February monetary policy statement, suggesting the tradables sector may become less of a force in keeping inflation low. Tuffley said that could see the RBNZ make a 0.2 percentage increase in its projections for annual inflation over the next 12 months.

Tuffley says: "One thing we can be quite confident in is that Adrian Orr will spend a lot more time engaging with the public. In the first five weeks of his term, it already feels like he has given more media interviews than the previous permanent governor gave over his whole five-year term." According to Tuffley, a much higher level of transparency will leave financial markets and the broader public more aware of what the RBNZ is thinking and why. Others agreed.

"Recent interviews have indicated the new governor intends to provide more open communication, so the press conference should provide interesting colour on the RBNZ's assessment and perception of risks going forward," says ANZ Bank New Zealand senior economist Liz Kendall.

"Adrian Orr's presentation style in the post MPS news conference will be more dynamic than his predecessor," says Bank of New Zealand head of research Stephen Toplis.