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New Zealand’s March quarter GDP rose by +0.5%/qtr, matching median expectations, to expand by 2.7%/y, notes Annette Beacher, Chief Asia-Pacific Macro Strategist at TDS.

Key Quotes

“The OIS strip remains flat at 1.75% throughout H2 this year, lifting to 24% priced for +25bp by end-Q1.”

“We expect the OCR to remain at 1.75% (as does unanimous consensus), the Governor to muse that the next move could be “up or down” as per the May policy assessment, and confirm that “this level will remain for a considerable period of time”.”

“This non-commitment by the RBNZ to adjust the cash rate one way or the other leaves us neutral the NZD at current levels.”