Various bank responses to the Reserve Bank of New Zealand rate cut today

TD Secruities' Annette Beacher:

  • "RBNZ is finally on the front foot
  • By waiting a little longer this stretches out the easing bias and prolongs downward pressure on the NZD"
  • Expects a cut to 3% in September

ASB's Nick Tuffley:

  • Expects a cut in September ... "but a cut in July is a very real possibility"
  • "RBNZ's forecast for the upcoming Q2 CPI releases looks surprisingly weak ... a distinct chance of a higher outcome"
  • It will be a tight call between July and September until some of the key upcoming data shed a little more light on the urgency (or otherwise) to follow up on June's OCR cut"

Nomura:

  • "The RBNZ continue to see NZD as overvalued and expected further depreciation, but dropped "unjustifiably high and unsustainable" language in reference to the NZD, a code for 'we stand ready to intervene if necessary', suggesting that the central bank is slightly less concerned about the currency.
  • Next rate cut is likely to come as early as at the July meeting, if milk prices continue to decline or if oil prices continue to rebound

ANZ, Cameron Bagrie:

  • Expects another cut in July
  • Says a 50/50 chance of cut in September also

Deutsche Bank's David Plank:

  • "We only have one more rate cut in our forecasts
  • We have the RBNZ delivering the second rate cut sooner than is currently priced

Westpac, Imre Speizer:

  • The guidance signalled a follow up 25bp cut
  • The previous warning about the high NZD exchange rate was repeated, but with different words

BNZ:

  • Expect a cut in July
  • Say there is a 50/50 chance of a cut in September also