NZD: Don’t expect any fireworks from RBNZ - Rabobank

Michael Every, Head of Financial Markets at Rabobank, suggests that only a small minority of analysts surveyed are expecting a further 25bp cut in the 2.25% RBNZ base rate this month.

Key Quotes

“As Bloomberg helpfully summarizes for us, “RBNZ’s Next Move is Anyone’s Guess as Wheeler Baffles Economists”. In short, NZ’s Mr. Wheeler (Dealer) has to grapple with a resurgent housing market that has nothing to do with economic fundamentals, yet an almost total absence of headline inflation and a struggling dairy sector.

He also has to look to NZD back below 70c but still clearly in an up-channel vs. USD (and widening the 12-month trade deficit to –NZD3.8bn as a result).”