RBNZ cuts rates by 25 basis points
ASB (Chief Economist Tuffley)
- RBNZ has maintained a clear easing bias
- The RBNZ has signalled further rate cuts, and we see downside to the RBNZ's inflation outlook, there remains scope for the NZD and NZ interest rates to continue to move lower over time
JP Morgan:
- Language on the kiwi has softened
- Expect another rate cut in September
Westpac (NZ Chief Economist Stephens)
- RBNZ's policy guidance is now a rather blunt "At this point, some further easing seems likely"
- This is a clear signal for another cut in September
- Softened its rhetoric on the exchange rate.... moved away from the key words "unjustified and unsustainable" instead ... "further depreciation is necessary"
- Not as dovish as markets were prepared for, particularly concerning the NZD exchange rate
- Stephens view is the OCR will fall to 2% with a 50 basis point cut possible on September 10 with the next MPS
ANZ (Senior Economist Smith)
- Easing bias was clear ... "although it was perhaps not as dovish as some had expected"
- Expects OCR to 2.5%
- "The RBNZ has upped its rhetoric on cuts - "further easings seems likely" is a step up from "further easing may be appropriate"
- No hurry to cut
- On the NZD, language was changed "with the market-sensitive words of "unjustified" and "unsustainable" not included ..." "The RBNZ still wants the NZ$ to fall given the commodity price backdrop, but it appears the RBNZ's pressing need for a sharp decline has eased"
More (from earlier):
- ANZ on the RBNZ ... not as dovish as some expected
- NZD/USD orderboard NZD/USD
- Westpac on the RBNZ decision & targets for NZD/USD & AUD/NZD
- NZD after the RBNZ cut decision - levels to watch
