RBNZ likely to deliver a little less and the RBA a little more - BNZ

Kymberly Martin, Senior Market Strategist at BNZ, suggests that the market prices slightly more than a 60% chance of an RBNZ’s OCR cut on 11 August and around a 1.85% OCR trough within the year ahead.

Key Quotes

“By contrast, the market prices that the RBA’s cash rate will be cut to 1.40%within this time.

Our core view is that both cash rates will trough at 1.75% (where the RBA’s cash rate currently sits). However, the risks around this view are that the RBNZ delivers a little less and the RBA a little more. That said, overnight the NZ TWI has pushed on up to its highest level since early-May last year. It is a full 8% above the RBNZ’s projections for the TWI’s average this quarter. If this level sustains then an August cut appears highly likely.”